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What is the real problem with GST in India?

It has been about 4 years since GST came into force in India. But it is still taking time to be fully implemented. Experts are saying that GST has been implemented in India in a hurry. For this reason, new problems are arising regarding GST.

Recently there was news that the central government does not have the money to participate in the GST of the states. Later, when there was a dispute, the central government released the GST money to the states?

So what is the problem? Because of which, there is a growing conflict between the Center and the states about GST.

States are more dependent on GST


The state government is excessively dependent on GST. Almost every decision about GST is taken by the central government. And no law is required for this. Only the GST Council needs to pass a resolution. And after this the change in GST is approved.

When GST was implemented, experts had raised the question whether the simple change in GST would be right?

Due to the process of changing the GST so easily, the central government has got a stock of powers. While the states feel cheated, the quarrel between the state and central government has increased even more due to the declining GST collection.

State governments say that you are not left much source of income with them. Only such sources remain petrol-diesel and alcohol. From which the state can make extra money.

At the same time, the central government was told by the state governments that GST collections will increase over time. And the loss that is incurred to the state governments. It will be completed. But Ho is contrasting it. There is a steady decline in GST election. And coronavirus has accelerated this. According to a recent report, this time the GST collection has been Rs 81000 crore. Which is the lowest level yet.

Frequent changes in GST rates

We are seeing that GST rates are being changed frequently. It is affecting small businesses in India more. And GST is being blamed for the slowdown.

Experts are saying that small businesses are more affected due to frequent changes in GST rates. Because he does not have such a big team that he can understand the changing GST. At the same time, some people say that they have not yet understood GST.

In such a situation, returning the GST file to the small business man is no longer an easy task. It is generally seen that GST is changed 3 to 4 times every year.

GST rates are reduced as soon as elections are near

Now it has become a trend that whenever general elections are held in a state, GST rates are reduced. This is adding additional pressure on the Indian economy. At the same time, the earnings of the state governments are also being affected. The Central Government has a majority in the GST Council. In such a situation, the state government is not able to resist it too much.

From time to time, BJP ruled states have also been opposing these changes. But this protest is not so vocal that the Central Government may be forced not to change the GST rates.

One, GST rates are reduced at the time of election. On the other hand, the state government also spends more government time during elections. Due to this, the tendency of borrowing in the Indian economy is also increasing. Which is putting additional pressure on the Indian economy.

High rates of gst

The highest rates of GST are being seen in India. If we talk about GST rates, there is less than India in the world. India is also the country with the highest GST slab in the world. In such a situation, these rates will also have to be reduced. At the same time GST slabs will also have to be reduced. However, the Central Government is constantly making efforts for this. But it does not appear to be successful so far.

There is no hope of a cut in the GST rate due to the corona virus now. Because the central government treasury is empty. Recently, in front of a central committee, the central government had said that it does not have the money to pay the share of states. In such a situation, you can get an idea of ​​the economic condition of the central government.

On the other hand, if we talk about countries like Australia, there are minimum GST rates. There is only one slab of GST in Australia. And each item is taxed at 10%. While four slabs of GST have been made in India. The maximum GST in India is 28%. A separate balance is applied over it. Due to this, GST has become more critical.

Benefits of GST declining over time

When GST was implemented, where was it going that the whole country is still under some kind of tax. Later the complexity in GST increased. The maximum slab in GST currently stands at 28%. Two or three cesses are also imposed on it. In such a situation, GST has become even more difficult. On the other hand, the rate of GST is also being continuously increased. Due to this, the difficulties of entrepreneurs are constantly increasing. Later, state governments were also given exemption to levy a separate cess on GST.

It was said that as the GST collection increases. By the way, the rate of GST will be cut. But now the opposite is happening.

The collection of GST is continuously decreasing. And the central government is continuously increasing the rate of GST also. In such a situation, doing business in India is no longer easy.

Increasing Inspector Raj in the country

In 1991, several reforms were implemented to promote globalization in the country. Later a major GST tax reform was implemented in the country in the form of GST. And the central government called it a game changer. The central government said that with the implementation of GST, foreign investment in the country will be larger. The Central Government had told about the possibility of generating crores of jobs.

However, news of raids has become common in newspapers every day to catch GST evasion. In such a situation, Inspector Raj is continuously increasing in the country. There is a constant fear among entrepreneurs that they may not be raided. This is also encouraging corruption in the country.

Recently, Prime Minister Narendra Modi launched a platform. Where there was talk of honoring honest taxpayers. Prime Minister Narendra Modi had to say that the investigating agencies would not disturb honest taxpayers. This is a proof that Inspector Raj is continuously increasing in the country.



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