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Commending taxmen for the enforcement measures in dealing with GST fraud, finance minister Nirmala Sitharaman on July 1 said the enhanced revenue collection in the recent months should now be the “new normal”.

In a message to tax officers on the fourth anniversary of GST, she said in the last four years the taxpayer base has almost doubled from 66.25 lakh to 1.28 crore.

She said for eight months in a row, GST revenues have crossed Rs 1 lakh crore mark. In April 2021, the collection was a record Rs 1.41 lakh crore.

“Commendable work has been done in the year gone by both in the area of facilitation and enforcement with numerous cases of fraudulent dealers and ITC being registered. The enhanced revenue collection in recent months should now be the ‘new normal’,” Sitharaman said.

A nationwide GST, which subsumed 17 local levies like excise duty, service tax, and VAT, and 13 cesses, was rolled out on July 1, 2017.

Implementation

Expressing satisfaction on overcoming most of the GST implementation challenges, including two waves of the Covid-19 pandemic, the minister also thanked taxpayers for their support in making the goods and services tax (GST) a reality.

“Its positive externalities such as unified market, removal of cascading and imp[roved competitiveness of goods and services has helped spur economic growth taking us further on the path to prosperity,” she said while commending both the central and state tax officers for making GST a success.

Central Board of Indirect Taxes and Customs (CBIC) will be issuing certificates of appreciation to 54,439 GST payers for timely filing of returns and a cash payment of GST in the last four years. More than 88% of these taxpayers are from micro, small and medium enterprises.

She said any reform of this scale, in a large and diverse country like India, can be highly challenging.

“The GST Council has shown immense sagacity and wisdom in redressing legitimate concerns of taxpayers and citizens by course correction whenever needed. This has manifested itself not just in measures to ease the compliance burden on taxpayers, especially MSMEs, but also reducing the tax burden on the common man,” Sitharaman added.

GST structure

Under GST, businesses with an annual turnover of up to Rs 40 lakh are exempt from GST. Additionally, those with a turnover up to Rs 1.5 crore can opt for the Composition Scheme and pay only 1% tax.

For services, businesses with turnover up to Rs 20 lakh in a year are GST exempt. A service provider having turnover up to Rs 50 lakh in a year can opt for a composition scheme for services and pay only 6% tax.

Under GST a four-rate structure that exempts or imposes a low rate of tax 5% on essential items and a top rate of 28% on cars is levied. The other slabs of tax are 12 and 18%. In the pre-GST era, the total of VAT, excise, CST, and their cascading effect led to 31% as tax payable, on average, for a consumer.

GST also represents an unprecedented exercise in fiscal federalism. The GST Council, which brings together the central and state governments, has met 44 times to thrash out how the tax will work.