The Goods and Services Tax (GST) completed two years of its implementation on Monday, 1 July. Conceived on the premise of 'one nation, one tax', GST was first introduced through the 101st amendment of the Constitution and, after being revised several times, made indirect tax collection significantly easier.
The tax rates on around 500 products have also been lowered in the course of the last two years. Only petroleum products, electricity and alcohol don't fall under the purview of GST.
But how much money has the tax reform raked in? Let’s find out.
GST Collection Over 2 Years
The government's monthly collections have been upwards of 1 lakh crore rupees in four out of the first five months of 2019 – January, March, April and May.
CGST (Central GST), SGST (State GST), IGST (Integrated GST) and compensation cess are included in the monthly total collections.
According to Budget documents and Controller General of Accounts' (CGA) figures, CGST collections jumped from Rs 2.03 lakh crore in 2017-18 to Rs 4.58 lakh crore in 2018-19. IGST fell from Rs 1.77 lakh crore to 29,000 crore and compensation cess rose from Rs 63,000 crore to 95,000 crore.
What Next?
The central government will roll out a new return filing mechanism on 1 October this year to further simplify the process. A prototype of this system will be launched on 1 July.
Under GST 2.0, businessmen having annual turnovers of more than Rs 5 crore will have to file returns every month while smaller businessmen will have to file returns every quarter.
The GST council may also reduce the tax rates on certain products in the near future.
Cement and automobiles, which currently fall under the 28% slab, will likely be in this list. According to experts, this will not only benefit the construction and auto sectors, but will also boost the slow growth rate of the economy.
There is a demand that electricity and petroleum be brought under GST as well, in order to stimulate the manufacturing industry. Their exclusion is one of the reasons why these commodities are expensive.
This decision, however, depends on the amount of revenue that the government will lose out on and whether it can afford that in the current economic climate.
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