New Delhi, Think tank GTRI on Friday suggested a slew of reforms like increasing the GST exemption limit for companies with a turnover of up to Rs 1.5 crore, reducing the number of slabs and removing state registration to make the GST to be more efficient. friendly and contributing to economic growth.
As the implementation of Goods and Services Tax (GST) celebrates its 7th anniversary, launched on July 1, 2017, it has become the world's largest platform for indirect taxes with over 1.46 million registrations, said the Global Trade Research Initiative (GTRI).
In FY24, GST collections reached Rs 20.18 lakh crore (USD 243.13 billion), with 29.85 per cent from imports, 26.92 per cent from inter-state supplies and 43.23 percent of supplies within the state.
The predominance of supplies within states highlights the need to simplify GST rules to promote interstate trade, the global trade research body said.
GTRI also suggested increasing the GST exemption limit for companies with an annual turnover of up to Rs 1.5 crore from the existing threshold of Rs 40 lakh.
This will be transformative for the MSME sector, promoting job creation and growth, the GTRI said.
Companies with a turnover of less than Rs 1.5 crore account for more than 80 per cent of registrations, but contribute less than 7 per cent of the total tax collection.
An annual turnover of Rs 1.5 crore is equivalent to a monthly turnover of Rs 12-13 lakh, which translates to just Rs 1.2 crore with a profit margin of 10 per cent, he said, adding that the new limit would reduce the burden of the GST system from Rs 1.4 crore on taxpayers to less. 23 lakh, enabling the introduction of invoice matching for 100 percent compliance, eliminating fake invoices and tax theft.
The increase in tax collection will offset the 7 percent tax loss, GTRI said.
He also suggested that reducing the GST on basic foodstuffs, health services and educational materials can make these necessities more affordable, encouraging greater consumption. The tax revenue on these is negligible.
As the implementation of Goods and Services Tax (GST) celebrates its 7th anniversary, launched on July 1, 2017, it has become the world's largest platform for indirect taxes with over 1.46 million registrations, said the Global Trade Research Initiative (GTRI).
In FY24, GST collections reached Rs 20.18 lakh crore (USD 243.13 billion), with 29.85 per cent from imports, 26.92 per cent from inter-state supplies and 43.23 percent of supplies within the state.
The predominance of supplies within states highlights the need to simplify GST rules to promote interstate trade, the global trade research body said.
GTRI also suggested increasing the GST exemption limit for companies with an annual turnover of up to Rs 1.5 crore from the existing threshold of Rs 40 lakh.
This will be transformative for the MSME sector, promoting job creation and growth, the GTRI said.
Companies with a turnover of less than Rs 1.5 crore account for more than 80 per cent of registrations, but contribute less than 7 per cent of the total tax collection.
An annual turnover of Rs 1.5 crore is equivalent to a monthly turnover of Rs 12-13 lakh, which translates to just Rs 1.2 crore with a profit margin of 10 per cent, he said, adding that the new limit would reduce the burden of the GST system from Rs 1.4 crore on taxpayers to less. 23 lakh, enabling the introduction of invoice matching for 100 percent compliance, eliminating fake invoices and tax theft.
The increase in tax collection will offset the 7 percent tax loss, GTRI said.
He also suggested that reducing the GST on basic foodstuffs, health services and educational materials can make these necessities more affordable, encouraging greater consumption. The tax revenue on these is negligible.
