10 Jul 2018, 11:31 — 5 min read
Summary: It’s been a year since the Goods & Services Tax (GST) was introduced in India. This was the most significant tax reform introduced in the nation since independence. As per industry experts, SMEs and startups were impacted the most with the rollout of GST. GlobalLinker members share their views on GST.
Assessment of GST
“Theoretically GST is good for the country but the implementation could have been better,” opines Sridhar Narayanaswamy, founder of Innovatus Systems. This is a view that is corroborated by several other SMEs.
Priya Florence Shah, founder of Blog Brandz shares, “It comes with the best of intentions but at best mediocre execution. The existence of various tax slabs, apparently allocated according to non-consultative perceptions, seems to defeat the whole 'One nation, one tax' premise. Also, consumers are getting taxed more without getting the promised return benefits. These inconsistencies will doubtlessly be ironed out as we go along, but for now GST is at best work in progress.”
Anirudh Gupta, CEO of Ashiana Financial Services shares, “Ours is a services business so wasn’t hugely impacted by GST. Earlier we used to pay 15% service tax, now we pay 18% GST. Many of our clients are SMEs and they are not too happy with GST. But I feel the teething problems are mostly sorted out and GST adoption will work more smoothly now.”
Business mentor, Dhananjay Parkhe says, “GST was projected as a panacea of Indians tax woes. As of now it has not proved to be anywhere near that promise. What was supposed to become one nation, one tax- is still to take the right form, shape and find easy adaptability and understanding by all.”
Advantages of GST
The new tax regime aimed to boost the government’s ease-of-doing business initiative and nudged small businesses to improve their compliance practices.
Sridhar shares, “It’s very good that 223 types of taxes have been subsumed under one tax rate, reducing the compliance time spent earlier. Overall, GST is good for the country because it leads to more tax revenue.” Priya Florence adds, “It is a slight improvement over the previous tax regime, which was a lot more confusing and arbitrary. Many previous taxes have been subsumed under GST.” Anirudh too believes that GST is largely good for the country.
As per Dhananjay, one of the advantages of GST is, “The extra queues at state borders are a thing of past. This saves valuable time for truck drivers and the logistics sector is getting a boost, thereby expanding the productivity of our nation.”
Shriyans believes the primary advantage of GST is, “Fast movement on trucks and overall logistics across India.” He also believes that GST is easy to understand.
Disadvantages of GST
New tax rates, change in the tax administration process, overhaul of the return filing procedure, upgrading technology – becoming GST compliant has been challenging for small businesses.
Priya believes that the consummate benefits of GST to consumers must still be evidenced.
As per Dhananjay, “The government faces the worst criticism of GST for having 5 tax slabs.”
Sridhar lists out three major drawbacks of GST, “Multiple rates have really put business owners under lot of stress in paying the correct tax amount; the website needs to be improved in terms of response time and should be more user-friendly; lack of a mobile app is surprising when everything is mobile-first these days.”
Shriyans believes a disadvantage of GST is, “It is tough to file returns. Each invoice has to be uploaded and that has to match the returns of the drawer organisation.” He further adds, “GST was promoted as one tax but still there is income tax, TDS. Everything should be accommodated within GST.”
Reflecting on the one-year anniversary of GST, it is safe to say that the initial hiccups of adoption are getting ironed out. As on April 2018, the GST collection crossed 1 trillion. Total assesses stood at 8.71 million and the total returns filed were around 6.04 million.
Disclaimer: This article is based solely on the inputs shared by the featured members. GlobalLinker does not necessarily endorse the views, opinions & facts stated by the members.
Posted byGlobalLinker Staff
We are a team of experienced industry professionals committed to sharing our knowledge and skills with small & medium enterprises.
Recommended articles for you
By Sandeep Raut
By Mudit G
By Suraj Rengan
7 Feb 2019, 15:23
7 Feb 2019, 09:56