Over seven years, GST has demonstrably delivered and cemented its place as a true game-changer and significant milestone for the Indian economy. At the outset, let’s look at the phenomenal journey of GST.
Total number of active taxpayers as on June 1, 2024 is 1.46 crore, out of which, 15.1 lakh are composition taxpayers. The total number of returns filed by these registered tax-payers for the months of July 2017 to May 2024 are 57.98 crore (GSTR-1), 71.31 crore (GSTR-3B) and 2.51 crore (CMP- 08).
The average monthly collection for the first seven financial years i.e. FY 2017-18 to 2023-24 has shown a positive trend with a range of ₹89,000 crore to ₹1.68-lakh crore. The total Gross GST revenue collected for the current financial year is ₹3.83-lakh crore. The average monthly collection during FY 2024-25 so far has been ₹1.91 crore. The long awaited GST appellate tribunal is also on the anvil.
The trend of generation of E-invoices by tax payers is encouraging. From October 2020 to March 2024, total number of E-invoices generated is 562 crore. This number for the month of April 2024 is 21.63 crore as compared to 17.43 crore for April 2023, a 24 per cent jump. It is further observed that 77 per cent of taxpayers having more than ₹500 crore turnover are generating E-invoices.
The maximum compliance (83 per cent) is reported by the tax payers having turnover between ₹100 crore and ₹500 crore. The 78 per cent of tax payers having turnover lower than ₹5 crore are generating E-invoice. In last FY-2023-24, top five sectors which were issuing E-invoices were electrical machinery equipment, mechanical appliances, iron and steel, bullion and jewellery and construction services. A gentle nudge will further improve compliance on this matter.
Similarly, 464.73 crore E-way bills, for the period April 2018 to March 2024 were generated. This number for April, 2024 is 9.66 crore as compared to 8.44 crore for April 2023, up 14 per cent. This trend speaks volume about the stabilization of E-way bill system and the trust reposed by the taxpayers. It has led to ease of doing business. Besides, through intervention based on E-way bill data, around ₹80 crore additional revenue was collected in March 2024 alone in the form of tax and penalty.
Council suggestions
The recently held 53rd GST Council made several recommendations relating to changes in GST tax rates, measures for facilitation of trade and for streamlining compliances such as uniform rate of 5 per cent IGST on imports of parts and tool-kits of aircraft to provide a fillip to MRO activities subject to specified conditions.
Besides several clarifications have been issued based on the recommendations of the GST Council to mitigate the difficulties of the taxpayers and to provide clarity and uniformity to the trade. However, GST is still a work in progress and the GST Council is receptive to the suggestions of the trade and industry for its further simplification.
According to Deloitte India’s third edition of the GST@7 survey, confidence in the indirect tax reform has significantly increased from 59 per cent in 2022 and 72 per cent in 2023 to 84 per cent in 2024 and has called for progressive steps to take the regime to a new level.
This robust performance may pave the way for reforms such as rationalization of tax rates, easing credit restrictions, implementation of compliance rating system, need for removal of parallel/multiple proceedings, unlocking working capital, issues in inverted duty structure, etc. along with underscoring the need for continued simplification, technology integration and capacity building.
Gaurav is IRS (C&IT),Commissioner, GST Policy Wing; and Raghavendra is IRS (C&IT), Director, GST Policy Wing, Ministry of Finance. Views are personal