Why gst is not implemented in india

No one, not the businesses or governments, seems satisfied with the current state of GST. It requires a lot of work before it produces the kind of benefits that were talked about prior to its roll out. Can Mamata go national? Successful coalitions at the Centre have been usually headed by leaders with weak power bases. Is a green Diwali possible?

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Convert invoices to e-Way bills and more. Updated on : Jun 07, - PM. Goods and service tax is taking India by the storm. The Indian GST case is structured for efficient tax collection, reduction in corruption, easy inter-state movement of goods etc.

France was the first country to implement GST to reduce tax- evasion. Brazil, Canada etc. Delay in the constitution of Appellate Tribunals It has been 3 years since the successful implementation of the GST law; however, the benches of the GST Appellate Tribunal are yet to be constituted in any state.

This results in pendency of litigations, which need to be addressed at the earliest to ensure cases under GST does not pile up, resulting in delays as was a common occurrence under the erstwhile laws.

Considering the positive and negative aspects, there are certain elements, which we believe require a significant policy change from the GST Council to align the GST law closer to its founding principles:. The tenure of this authority was extended recently till 30 November However, in the absence of any methodology provided in the GST law, there have been cases where businesses have felt unfair treatment due to the order passed by the NAA, which requires businesses to repay huge sums to their customers.

An unfavorable order from NAA also creates a negative impression about the values of a business in the minds of its customers. The constitutional validity of the NAA is also a subject matter of many petitions pending across various High Courts. The GST Council should undertake a serious consideration of this matter and propose suitable changes to GST law to either notify a methodology for determining the profiteering or do away with this authority completely to achieve ease of doing business.

The GST Council should look into this aspect and merge the various GST rates into fewer slabs to avoid confusion and minimize the possibility of unwarranted litigation. Also, the different cesses such as Compensation cess, Kerala flood cess, Sugar cess should be abolished. A landmark change such as GST was expected to bring with it initial hurdles and difficulties. The government and GST Council, on most occasions, have acted proactively to help businesses overcome such problems as a result of which, many sectors are experiencing the benefits of having a single, unified tax structure.

With the GST regime becoming more or less stable, it is an opportune time for the government to look into the taxpayer's suggestions, recommendations and fix the pending loopholes and lacunae in the law and come out with the improvised version in the near future.

In our view, steps must be taken to safeguard against unwarranted litigation and to make the system more taxpayer-friendly. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. All Rights Reserved. Password Passwords are Case Sensitive. Forgot your password? Free, unlimited access to more than half a million articles one-article limit removed from the diverse perspectives of 5, leading law, accountancy and advisory firms.

We need this to enable us to match you with other users from the same organisation. It is also part of the information that we share to our content providers "Contributors" who contribute Content for free for your use. Learn More Accept. What followed was disagreement over how to provide for this shortfall, with the centre proposing borrowing by state government, something that most states eventually signed off on. It is also not uncommon to find state governments complaining about the centre delaying compensation payments.

Moral hazard in GST Council: guaranteed returns and never-ending demands for lower rates. The fact that state governments have been given a guaranteed revenue growth under the GST framework has created a moral hazard for the GST Council. There are repeated demands for reducing GST rates on all kinds of commodities from time to time, which have the effect of lowering the weighted average GST rate and therefore overall revenue collections.

Against the revenue neutral rate of That GST has not lived up to the initial expectations of revenue mobilisation created a tussle between the Centre and the states on the question of compensation and is increasingly becoming the main tax game in town as far as providing relief to the masses is concerned the demand for waiving off GST on pandemic related commodities being a case in point would suggest that it has created a big, and perhaps difficult to reconcile problem.

Whether or not the GST regime is simplified in the days to come will depend on the overall fiscal outlook of the Indian state. India has seen a regressive shift in its tax burden, with an increase in share of indirect taxes.