GST Reduced Rate has increased Compliance and doubled Tax Payer base

Remembering the important Key role and contribution of Former Finance Minister Arun Jaitley towards the successful implementation of Goods and Services Tax in India The Finance Ministry on the occasion of First Death Anniversary of Arun Jaitley is paying respects to him. 

Goods and Services Tax

GST Initially was subsumed with 17 Local levels and was rolled out in July1 2017. The Finance Ministry tweeted that the GST has reduced the rate which helps to double taxpayer base to 1.24 crore with increased compliance. Earlier The Revenue Neutral Rate (RNR) was 15.3 Percent and the weighted GST rate was only 11.6 percent.

Businesses with an annual turnover of up to Rs 40 Lakh are GST exempted. Initially, The limit was Rs 20 Lakh. Additionally, businesses with a turnover up to Rs 1.5 Crore can opt for a composition scheme and pay only 1 percent tax. Threshold increased to Rs 40 Lakh in Goods and the composition was increased from Rs 75 Lakh to Rs 1.5 Crore.. The Rate of Composition for Manufacturers was lowered to 1 %. The Composition scheme was also extended to services also.

The government has also introduced Special Lower Rates for Construction, Restaurants, etc without ITC. The Tax rate on a large number of items was brought down. Out of a total of 230 items in 28 percent slab about 200 items have been shifted to lower slabs. Rates reduced on almost 400 items (goods) and 80 items (services) since the rollout of GST.

Housing Sector has been placed in 5 Percent Slab while GST has been reduced to 1% on affordable housing. All Processes in GST have been fully automated online. The Government has made GST is both consumer and friendly taxpayer. Earlier the number of assesses covered by the GST at the time of its inception was about 65 Lakh and now its base exceeds 1.24 crore.