GST@4, a ‘new normal’: Taxpayer base doubled to 1.28 crore, says Nirmala

Virendra Pandit 

New Delhi: Finance Minister Nirmala Sitharaman said on Thursday the taxpayer base under the Goods and Services Tax (GST) regime has almost doubled from 66.25 lakh to 1.28 crore during the last four years of the far-reaching tax reform.

Applauding the role of tax persons for the enforcement measures in dealing with the GST-related frauds, she said the enhanced revenue collection in the recent months should now be the ‘new normal’.

In a message to tax officers on the fourth anniversary of historic tax reform, she said for eight months in a row, GST revenues have crossed Rs 1 lakh crore mark. “We have seen record GST revenue collection of Rs 1.41 lakh crore in April 2021.”

“Commendable work has been done in the year gone by both in the area of facilitation and enforcement with numerous cases of fraudulent dealers and ITC being registered. The enhanced revenue collection in recent months should now be the ‘new normal’,” Sitharaman said.

The then Finance Minister Arun Jaitley had rolled out the nationwide GST regime, which replaced 17 local levies like excise duty, service tax, and VAT and 13 cesses, on July 1, 2017.

Expressing satisfaction on overcoming most of the GST implementation challenges, including two waves of the Covid-19 pandemic, she also thanked taxpayers for their support in making the GST a reality.

“Its positive externalities such as unified market, removal of cascading and improved competitiveness of goods and services has helped spur economic growth taking us further on the path to prosperity,” Sitharaman said as she commended the central and state tax officers for making GST a success.

The Central Board of Indirect Taxes and Customs (CBIC) will soon issue certificates of appreciation to 54,439 GST payers for timely filing of returns and a cash payment of GST in the last four years. More than 88 percent of these taxpayers are from micro, small and medium enterprises (MSMEs).

Any reform of this scale, in a large and diverse country like India, can be highly challenging, the FM said.

“The GST Council has shown immense sagacity and wisdom in redressing legitimate concerns of taxpayers and citizens by course correction whenever needed. This has manifested itself not just in measures to ease the compliance burden on taxpayers, especially MSMEs, but also reducing the tax burden on the common man,” Sitharaman said.

Under the GST regime, goods-related businesses with an annual turnover of up to Rs 40 lakh are exempt from GST. Additionally, those with a turnover of up to Rs 1.5 crore can opt for the composition scheme and pay only 1 percent tax.

For services, businesses with turnover up to Rs 20 lakh in a year are GST exempt. A service provider having turnover up to Rs 50 lakh in a year can opt for a composition scheme for services and pay only 6 percent tax.

Under the GST regime, a four-rate structure that exempts or imposes the lowest rate of tax 5 percent on essential items, and the highest rate of 28 percent on cars is levied. The other slabs of tax are 12 and 18 percent. In the pre-GST era, the total of VAT, excise, CST, and their cascading effect led to 31 percent as tax payable, on average, for a consumer.

The GST also represents an unprecedented exercise in fiscal federalism. The GST Council, which brings together the central and state governments, has met 44 times to thrash out how the tax regime will work.