GST brought relief to households with reduction in prices: FinMin

The Goods and Services Tax (GST), which completed 7 years of implementation on Monday, has made household items cheaper, improved the tax compliance of businesses and widened the tax base, the finance ministry said Monday.

"With reduced tax rates on household goods after GST implementation, #7yearsofGST has brought happiness and relief to every home through lower GST on household appliances and mobile phones," the finance ministry said in a series of posts on the social media platform X.

The finance ministry said the GST taxpayer base has increased to 1.46 crore in April 2024 from 1.05 crore as of April 2018.

"We have witnessed a quantum jump in taxpayers' base along with improved compliance," Central Board of Indirect Taxes and Customs (CBIC) Chairman Sanjay Kumar Agarwal said.

The GST was rolled out on July 1, 2017, replacing 17 local taxes.

 

Giving example, the ministry said that the rate of food items like unpacked wheat, rice, curd, and lassi, which were taxed at 2.5%-4% before GST implementation, is nil after the GST rollout. The ministry said there was saving on expenditure on many items of mass consumption after GST implementation like cosmetics, wrist watches, furniture and mattresses, which are taxed at lower rate than pre-GST era.

Even items like mobile phones, TVs refrigerators, washing machines and electrical appliances, which attracted 31.3% taxes in the pre-GST era, are now in the 18% GST slab in GST regime.

The finance ministry added that GST has also reduced the compliance burden for the small taxpayers, by waiving off annual return filing requirement for taxpayers with aggregate annual turnover of up to 2 crore in fiscal 2023-24.

Experts say that going forward, rationalizing GST rates, removal of ITC restrictions, and implementing specific sectoral reforms, will set a new era of GST reform. "As we celebrate the 7th anniversary of GST today, the enhanced positive sentiment of industry and the continued buoyancy in GST collections sets the decks for pursuing forward-thinking reforms under GST 2.0," said Mahesh Jaising, partner, direct tax, Deloitte India.

Source:: The Economic Times,  dated 01/07/2024.