The Economic Survey 2017-18 report released on Monday provides evidence of how the Indian economy is be-coming more formalised and…
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The Economic Survey 2017-18 report released on Monday provides evidence of how the Indian economy is be-coming more formalised and the expectation of bringing greater stability from the ambitious indirect tax reform Goods and Services Tax (GST).
The report said there has been a 50 per cent increase in the number of indirect taxpayers due to voluntary registration under GST, especially from small enterprises that buy from large enterprises and want to avail themselves of input tax credits. The Survey said of the 9.8 million registrations under GST, 3.4 million are new registrations. Of the 6.4 million registrations, 5.8 million were those who were registered under VAT, 6 lakh were registered under service tax and around 10,000 under excise duty.
Chief economic adviser Arvind Subramanian said: “For such a disruptive change and lot of teething chal-lenges the revenue collec-tions from GST are very reasonable.”As many as 1.6 million of the 9.8 million were registered under the composition scheme, under which the registrants pay lower taxes (1 per cent, 2 per cent and 5 per cent) on their turnover, but are not eligible for input tax credits.
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Mr Subramanian said: “There is a greater scope for further simplification and rationalisation of rates to make GST less complex. In the next 3-5 years, there could be a shift to a single rate structure.”
The Economic Survey said due to the inability of claiming input credits under composition scheme, “about 1.9 million (24 per cent of total regular filers) of the registrants sized between the GST threshold of Rs 20 lakhs and the composition limit, who could have opted for the composition scheme, chose not to do so and instead decided to file under the regular GST.
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