Expand GST Base, Reduce Burden of Compliance: Survey
Document criticises govt decision to keep health and education completely out of GST
New Delhi: The mid-year Economic Survey has called for including electricity, alcohol, real estate, health and education, in the framework of goods and services tax to expand the base of the newly implemented indirect tax.
“Bringing electricity into GST framework would improve competitiveness of Indian industry because taxes on power get embedded in manufacturers’ costs, and can be claimed back as input tax credit,” said the Economic Survey Volume-2, authored by chief economic adviser Arvind Subramanian. Inclusion of land and real estate, and alcohol in GST will improve transparency and reduce corruption.
Criticising the decision to keep health and education completely out of GST, the survey said the move is “inconsistent with equity” as these services are consumed disproportionately by the rich.
It also called for increasing tax on gold and jewellery from the current 3%, saying it is another segment “disproportionately consumed by the very rich”.
The survey said there are “early signs of tax base expansion”. In June and July, 6.6 lakh new agents previously outside the tax net have sought GST registration, it said. This is expected to rise consistent- VAT rates across 29 states reduced to 6 national rates
as one set of forms once a month
clause likely to be used sparingly of tax base expansion; 6.6 lakh agents sought registration
direct tax mopup by providing more info
ly as the incentives for formalisation increase. “Preliminary estimates point to potentially large increases in the tax base as a consequence,” the survey said.
Rolled out on July 1, GST has brought in uniformity or the principle of ‘one good, one tax’ all over the country. “So relative to the past, there is now uniformity rather than multiplicity as well as considerably less complexity,” the survey said.
of goods, financial inclusion
The survey also made a case for reducing GST compliance burden and asked the government for more centralised procedures. Increased compliance requirements, it said, will be faced only by a small number of agents with a pan-India presence whose ability to comply will be commensurately greater.
Referring to discussions in the GST Council, the survey said that attempts were made to preserve the previous, simpler system. “Going forward, there is scope for more centralised procedures to minimise the compliance burden,” it said, and asked the GST Council to take up these challenges in the months ahead to take India from a good GST to a better GST.
GST NOT COMPLICATED BENEFITS