The GST regime has come as a new fire within the country. This fire has blown almost every industry in the marketplace. And this fire continues to be flaming higher with the continuous amendments made to the Act every now and then. But have these amendments come for the better? Before we could answer that question, let us first understand what is the GST Act and if there have been any significant benefits of the GST Act.
What is the GST Act?
GST is expanded as goods and services tax. The GST Act is the taxation law governing the imposition of tax on the goods or services supplied by any supplier. The Act aimed to bring the different tax laws under the indirect taxes into one single umbrella. By simplifying the law, the government aimed to reduce the burden on the taxpayers. These taxpayers could be companies, service providers, or end-users.
Advantages of the GST Act
There have been many advantages of the GST Act. Some of the advantages worth to mention are:
No Cascading Effect of Taxes
In the earlier tax regime, there was a problem of the multiplicity of taxes and double taxations. This was due to the levying of taxes at multiple points under multiple laws. This led to the cascading effect of taxes. The GST law has eliminated this effect by bringing uniformity in the tax rates and the need for a single time payment.
Now the taxpayers just have to pay GST at the specific slab rates, and that is it. So, there is no cascading effect of taxes.
Increased Exemption Limits
The GST law has given due consideration to the small service providers and traders in easing out the things for them. The law has increased the limits of exemption for these traders. This has made it easier for them to carry on their business.
The law has introduced a composition scheme for the small traders, which gives them an option to pay tax at a nominal rate at a fixed percentage of their turnover. This scheme also benefits the small traders and service providers by helping them save a considerable amount of tax.
With the elimination of multiple laws gets eliminated the need for multiple compliances. Now the taxpayers need to comply with one single law. This makes things very easy for the taxpayer. The ease also comes from the fact that GST is actually a very simple and easy to understand taxation law.
The online portal for GST has brought the tax offices to the houses of people. This has made compliance with every requirement extremely easy for the taxpayers. Now the taxpayers can get their GST registrations in a click of a mouse. The payments are made easy with online modes. Everything is digital, and it has greatly contributed to the ease and comfort of the taxpayers.
Foregoing were some of the major advantages of the law. However, despite these advantages, the law is not free from flaws. Here are some of the disadvantages of GST.
Disadvantages of the GST Act
- Although the cascading effect of taxes has eliminated, there are still costs that you need to incur in the form of software purchases.
- It is difficult to maintain the GST compliant invoices and returns, especially for the non-technical persons, since everything is online.
- The law will increase the operational costs for the businesses since they will have to engage people proficient in GST.
All these disadvantages have put a question mark on the effectiveness of GST. Continuous improvements are made to the Act with amendments and changes to overcome these disadvantages. Here are some of the amendments and changes in the GST Act.
Amendments and Changes in the GST Act
- The composition scheme as not a part of the original bill. It was introduced later to reduce the burden on the small traders and service providers.
- Considering the increased burden of operational costs and the costs of software on the businesses, the law increased the registration threshold limit for the suppliers of the goods.
- For security reasons and to make the registration safer, Aadhar authentication was later made mandatory for getting registered under the GST Act.
- The online payment facility was optional at the inception of the Act. However, considering the scope of online payments and as a step to promote Digital India, the provision of an online payment facility was made mandatory under the Act.
- On the initial introduction of Act, it had a single provision of monthly furnishing of returns. This was pretty hectic for the taxpayers. Looking at the problems the taxpayers were facing, an amendment was made to the Act giving the taxpayers an option to furnish their returns on a quarterly basis.
- There was no facility as such for the taxpayers to maintain and keep track of the payments they are making under GST. To offer ease for the same, there were changes in the online portal. The facility of a cash ledger account was given to the taxpayers where all their payments shall be reflected. This made tax payment maintenance extremely easy for businesses.
All these amendments have extremely benefitted the taxpayers and on a wide scale. They have easy access to everything because of the GST portal, which is an online tax office for GST. The amazing facilities on this portal make it worth the value. Online payments, registrations, downloads, and other transaction management have significantly promoted Digital India. The return furnishing is easier; the payments are easier; the maintenance is easier. And there is also a significant saving in tax, especially for small businesses. So, the law and all its amendments and changes have significantly come for good.
We can say without a doubt that every change, every amendment in the GST Act has been for the better. The Act is still evolving. With time more changes are expected. And all such changes will take the Act towards the good of the taxpayers.
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