GST Return Filing Tool to cut down the Taxation Restrain

The Goods and Services Tax continues to be unsettled even after the nine months of its implementation. And the uneasiness is not only with the business but the government as well. The GST Council has long been trying to simplify the overall compliance and also control evasion. But it seems that the government is completely drained of trying multiple processes to accomplish the regime’s primary objectives. Similarly, the ideology of the government to bring unified taxation in the nation also seems to be fading away. However, the only option to protect the Goods and Services Tax Act from collapsing is to act now with great determination.

The shortfall of revenues

Due to the complex structure of the new taxation regime, there wasn’t enough revenue poured into the central government’s account. And following the fiscal deficit, the state government hasn’t been able to proceed with the matters related to the economic development. However, the center has promised to allow 14% extra revenues of the last year’s collections. And only God knows how.

Before the roll-out of the regime, the government boasted extensively about GST changing the face of taxation. Even the businesses and industrialists acted more than normal about a regime that is the most complex taxation process taking over the nation entirely. However, the people weren’t even aware of the GST return filing tool still took a pre-known risk. Following the same risk, the businesses are bound to encounter taxation problems like:

1. High compliance cost
   
2. Collapsed e-way billing system
   
3. Complex return filing mechanism
   
4. The multiplicity of the tax rates
   
5. Unavailability of the tax refunds
   
6. The dire need for simplification
   

In order to make the compliance easier, the government needs to overhaul the regime completely. Most of the countries have also implemented the Goods and Services Tax Act but the simplified one. A simplified GST means maximum two or three tax rates and selected items in the exemption list. Also, the taxation should be levied at the center level. But in the case of India, the government has opted to keep five different tax rates functional, a whole lot of items in the exemption list, and the tax levied at both the state and center level.

What should be changed?

Although the government promoted the use of GST return filing tool for an easy GST compliance, the number of return filers have still been declining. The most important thing to comprehend is that the multiplicity of the taxes if providing no benefit, neither to the government nor to the businesses. The tax category of 28% that comprises all the luxury items is completely pointless. The reason being that only the elite class section of the society purchases super expensive items. Hence, it makes no sense estimating the annual income of these people and keeping a separate tax category functional for them.  

Besides the 28% tax rate, the slabs of 12% and 18% should be combined into one or reduced. This way, the tax levied on hundreds of items will be streamlined. If the GST applicable in other nations are to be considered, then most of them have kept the threshold limit equivalent to INR 50 lakh. But as per the GST rules in India, the threshold for the businesses is INR 20 lakh.

Due to such lower threshold, the management of millions of taxpayers has become difficult. A considerable inflow of the businesses in GST would have ensured stability and then the government could have changed the threshold limit.

Summary

Since the structure of the Goods and Services Tax is complex, the government should apply a quick fix to the regime to stabilize the chaotic situation first. The government could initially make the compliance less hectic by allowing the taxpayers to file quarterly returns and pay monthly tax. Also introducing a single page return would help the businesses a lot. And instead of exempting the goods and services from the regime and creating disarray for the return filers, the government could mold the threshold limit. The only chance of the regime survive and boost the economy is the modification of its rules and regulations.