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The Hindu
2 days ago
- Business
- The Hindu
GST After 8 Years: Challenges, Gains, and Future Reforms
Published : Jul 11, 2025 17:23 IST - 9 MINS READ The Goods and Services Tax (GST), widely hailed as a good, simple tax, has the best and the worst of all features of the country's indirect tax system at this juncture, over eight years after its rollout. Both the United Progressive Alliance (UPA) government (2004-2014), led by the Congress, and the National Democratic Alliance government (NDA), led by the BJP in its first two tenures (2014-24), have claimed credit for this consumption-based tax, which was launched on July 1, 2017, at a midnight special session of Parliament by the then Finance Minister Arun Jaitley. He used all his lawyerly acumen and persuasiveness to bring on board all the States and Union Territories. Early years Broadly seen as a precursor to a 'one-nation, one tax' in a country where the indirect tax system was riddled with multiple taxes and mind-boggling rates, GST was not instantly endorsed by trade and industry; it had to face a whole host of problems ranging from teething troubles to ground-level glitches that any new tax regime must wrestle with. GST subsumed as many as 17 local levies and taxes and 13 cesses into a five-tier structure, broadly simplifying the tax rates at 5, 12, 18, and 28 per cent. Bullion and jewellery had its own sui generis GST rate. Luxury and demerit goods such as tobacco are taxed at the highest rate of 28 per cent in the name of 'sin tax', while packed food and essential items attract the lowest rate of 5 per cent. The threshold limit of annual turnover for registration under GST for units engaged in supply of goods was raised from Rs.20 lakh initially to Rs.40 lakh effective from April 1, 2019, to ensure that GST compliance was not is required by small units below the threshold turnover and they were exempted from GST. Also Read | GST & federalism Grey areas With the benefit of hindsight, experts have contended that while GST has by and large simplified indirect taxes, many grey areas still linger despite the passing of eight years. They encompass a wide swath of issues, from rate rows to procedural complexities, burdening domestic taxpayers and professionals with compliance hurdles and troubles galore. This is conclusively borne out by the avalanche of GST circulars down the eight years which show ongoing compliance issues. There are numerous instances where the courts have conclusively ruled that clarifications of the Central Board of Indirect Taxes and Customs (CBIC) circulars could not override the CGST Act, bringing clarity and relief to the taxpayers. According to fiscal experts, because tax authorities are inundated with representations and courts give new interpretations, it is no surprise that the CBIC issues circulars to clear the air, ensure uniformity, and facilitate smooth compliance. But it is certainly not a commendable state of affairs when there are over 8,000 disputes involving the GST system over eight years, even as the long-delayed process of setting up an appellate tribunal has barely begun, with the GST Appellate Tribunal (Procedure) Rules, 2025, coming into force in April this year. GST Council meeting Meanwhile, the the GST Council has not held a meeting for over six months. The Council, which meets every quarter, last held a meeting on December 21, 2024, wherein the States discussed many issues bearing on the fiscal relationship with the Centre in the light of GST revenues not growing at the 14 per cent annual rate as assumed with the advent of the tax. There is also a need for higher allocation from Central taxes to their revenue kitty now that the 16th Finance Commission has completed the process of consultations with the States and is in the midst of getting its report ready by October 2025. Even as the High Courts are neck-deep in disputes, most of which would invariably relate to procedure or method rather than the statute itself, the professional tribunal will hopefully deliver, and to the satisfaction of the stakeholders. Also Read | Time to overhaul or replace GST June collection growth slips Be that as it may, the eighth anniversary of GST on July 1 was coterminous with the dismal tax collection for the month of June, after two resounding performances of of Rs.2 lakh crore each in April and May 2025. GST collections in June grew only 6.2 per cent year-on-year, the slowest since June 2021 and lower than the fantastic run of 12.6 per cent and 16.4 per cent in April and May, respectively. The slide-down stemmed from a dip in collections in domestic transactions and imports. Net GST revenue adjusted for refunds and transfers (input tax credit and after States' share) stood at Rs.1.59 lakh crore, marking am even lower and tepid 3.3 per cent year-on-year rise. As it is a consumption tax, a tangible fall in yields mirrors anaemic economic activity, besides inveterate inefficiencies in the system, which need to be tackled with new processes and procedures to ensure et the cooperation of all the beneficiaries and stakeholders for the overall efficacy of the tax. GST and ease of doing business Undoubtedly, the simplified GST regime has, by degrees, transformed the ease of doing business in the country over the years, as it has resulted in a 33 per cent improvement in transport time, enabling the logistics business to prune drastically the dwelling time in various check-points that had become choke points in the free movement of goods across the States and within States. There has also been a distinct improvement in the number of commercial taxpayers, from 60 lakh to 1.5 crore, with an average monthly collection that is close to Rs.2 lakh crores. E-invoicing and e-way bills have had a tremendous effect in terms of efficiency in operations for business and trade. It is not all hunky-dory in the GST ecosystem, though, as the total number of GST evasion cases detected by the Central government since 2020 has gone up significantly from 12,596 in 2020-21 to 25,397 in the first 10 months of 2024-25, involving a total amount of Rs.6,79,505 crore in a total of 86,711 cases in the period. Of this, Rs.1,23,896 crore has been recorded as voluntary deposits by the defalcators. In input tax credit or refund claims, there were 42,673 cases during this period involving Rs.1,66,241 crore, of which Rs.12,367 crore was accounted for by voluntary deposits, according to Minister of State for Finance Pankaj Chaudhary in a written query in the Lok Sabha on March 10, 2025. Finance Ministry mandarins claim that there are several ways to help in improving compliance and preventing tax evasions such as digitisation through e-invoicing. Operational efficiency Besides, GST analytics such as automated risk assessment based on compliance attributes of taxpayers, highlighting of outliers based on system-flagged mismatches, and providing intelligence inputs with a view to manage GST revenue risks through various tools have gone a long way to bring efficiency in operations. Efficiency has been improved by the ability to generate actionable reports, gleaning inputs about GST non-compliance or evasion on the basis of identified anomalies in taxpayer comport—including potential tax evasion, fraudulent registration, and suspicious e-way bill activity—and selection of returns for scrutiny and taxpayers for audit based on various risk parameters. The GST Amnesty Scheme under Section 128A of the IT Act announced this year is a welcome step to help taxpayers clear old arrears sans excruciating penalties. It is germane to note that a PricewaterhouseCoopers report forwarded to the GST Council, whose Chairperson is the Union Finance Minister and all State Finance Ministers are Members, pitched for the simplification of procedures, lessening of compliance burdens, and reduction in rates to three with a view to broadening the base by bringing petroleum products under the GST ambit. PricewaterhouseCoopers said: 'A transition from a 4-tier to a 3-tier rate structure would reduce interpretational disputes, improve tax certainty, and simplify compliance.'. Even as these crucial reforms are underscored to render this important tax to improve its operational efficiency, it is not altogether out of place to highlight the overwhelming urgency on GST reforms recommended by the Public Accounts Committee (PAC) of Parliament. The 19th report of the PAC, tabled in the Budget session of Parliament, sought a comprehensive review of the GST framework to preclude 'unnecessary procedures and requirements' and advocated a a 'revamped GST 2.0', with due consultations of all the stakeholders. Also Read | GST: For a fair share for the States Room for improvement In its scathing review of the extant GST, the PAC noted that the failure to put in place the mandatory Comptroller and Auditor General (CAG) audit of the Compensation Fund Account for more than six years had 'adversely affected' release of compensation to States. It may be noted that GST's advent in 2017 had led to apprehensions among States about loss of fiscal autonomy and centralisation of all collections to the Union. The GST (Compensation to States) Act, 2017, came into force to compensate for this loss of revenue and promised States a 14 per cent annual revenue growth for five years (2017-22). But many States have bemoaned either non-receipt of funds or undue delays which they said negatively impacted governance. Alluding to filing and refunds by GST payers, the PAC lamented the extant mechanisms as inadequate, pointing at unconscionable waiting periods for refunds which could result in potential cash flow problems to businesses operating on wafer-thin margins in a high-cost economy. It said that the refund processing system ought to provide clearer timelines for processing claims and regular updates on their status. According to fiscal experts, the time is ripe for the Finance Ministry to strongly consider the growing concerns of the States regarding their financial requirements and the revenue share they get not only through this indirect tax but also in the overall devolution of taxes, and reduce the Centre's recourse to cess, as it is not not shareable with States. Alongside, other overriding concerns voiced by trade and industry also need to be factored in by the GST Council in its forthcoming meeting so that the beneficiaries bear this tax with less pain and more gain to the treasury in a mutual win-win game, going forward. G. Srinivasan is a freelance journalist based in Delhi who previously worked with The Hindu Group.
Business Standard
30-05-2025
- Business
- Business Standard
Avantel alltos 2.02 cr equity shares under rights issue
Avantel has allotted 2,02,26,100 equity shares of face value of Rs 2 each on rights basis to the eligible shareholders at an issue price of Rs.40/- per equity share. Consequent to the said allotment, the paid-up equity share capital of the company stands increased to 26,49,61,920 equity shares of Rs 2 each. Powered by Capital Market - Live News
India.com
29-05-2025
- Business
- India.com
Amitabh Bachchan buys fourth plot in Ayodhya, will serve as a memorial for Harivansh Rai Bachchan, its worth Rs.., his total net worth is…
In the glitzy and glamorous world of Bollywood, where fame and fortune go hand-in-hand, success and wealth also keep changing every Friday. In such an unpredictable career landscape, it is essential to secure a lasting legacy. There is one such star in Bollywood who seconds this thought and is proving that reinvention is the ultimate power. Not just chasing scripts, this blockbuster star is also chasing land deal. The person we are talking about is none other than 'Sheenshah' of Bollywood, Amitabh Bachchan. After the historic adoption of the Ram Mandir, Ayodhya has become a gold mine for investment, and superstars like Amitabh Bachchan are making the most of this trend. Previously in 2o025, reports suggested that Amitabh had already made an investment around Ram Mandir. He acquired a 54,000 sq ft plot within a 10 KM radius of the temple, and the investment was made through his father's, Harivansh Rai Bachchan Trust, to serve as a memorial for his father But before this also, Amitabh Bachchan and his son Abhishek Bachchan had bought 10 luxury apartments accounting to Rs.25 crores. Besides this, he also invested in two major projects, including a 5,372 sq. ft. plot worth ₹4.54 crore, and another plot from producer Anand Pandit's company valued at around ₹10 crore. Now Amitabh Bachchan is again in headlines for his fourth investment in Ayodhya. He recently purchased a 25,000 sq. ft. plot located near the Saryu River. The plot's worth is around Rs.40 crores and is part of a high-development area. When it comes to wealth, the Bachchan family stands out. According to a recent statement by Jaya Bachchan in the Rajya Sabha, their total net worth is ₹1,578 crore. This includes ₹729.77 crore worth of property and ₹849.11 crore in cash and investments. With their ongoing work and smart investment decisions, especially in luxury real estate, this number is likely to grow even more in the coming years. Amitabh Bachchan is not just chasing fame, but he is also making smart investments and building a strong presence in India's growing real estate scene.
Business Recorder
28-05-2025
- Business
- Business Recorder
MYT regime from 2023-24 to FY 2029-30: Nepra approves KE's average power supply tariff at Rs39.97
ISLAMABAD: National Electric Power Regulatory Authority (NEPRA) has approved KE's average power supply tariff of Rs 39.97 per unit for FY 2023-24 under Multi Year Tariff (MYT) regime from 2023-24 to FY 2029-30. This includes power purchase excluding transmission cost of Rs 31.96 per unit, transmission cost of Rs 2.86 per unit, distribution cost Rs 3.31 per unit, supply margin Rs 2.28 per unit and Prior Year Adjustment negative Rs 0.44 per unit. According to NEPRA, since the impact of any such determination is to be made part of the consumer end tariff, therefore, the Authority, conducted a public hearing on June 27, 2024. MYT regime: Nepra unveils KE's 7-year D&T tariffs The power utility company's total revenue requirement is estimated to be Rs 606.920 billion, for FY 2023-24, of which supply margin will be Rs 34.681 billion, O&M cost Rs 5.91 billion, working capital negative Rs 1.244 billion, recovery loss, Rs 36.253 billion, gross margin Rs 40.921 billion, other income negative Rs 6.240 billion, net margin Rs 34.681 billion and prior year adjustment negative Rs 6.690 billion. The Authority also considering the fact that FY 2023-24 has already lapsed and FY 2024-25 is almost 11 months gone, also obtained ICE's actual recovery ratios for the FY 2023-24 and FY 2024-25. As submitted by KE its actual recovery for the FY 2023-24 remained at 91.50%, whereas FY 2024-25 is expected to close at 90.50%. The financial impact of under recovery of 8.50% for FY 2023-24 and 9.50% for FY 2024-25, as reported by KE, is around Rs.40 billion and Rs.57 billion respectively. The Authority noted that return allowed to KE for its distribution function is around Rs.21.6 billion, meaning thereby that effectively KE would be incurring losses for the first 02 years of MYT, if no recovery loss is allowed to KE. This may compromise the financial viability of the company, which is neither in the interest of the consumers nor power system as whole. According to NEPRA, international precedents also suggest that 100% billing recovery is generally not mandated. Instead, regulators allow for reasonable bad debt provisions and encourage utilities to improve collection efficiency through performance targets and incentives. While high recovery rates are desirable, regulators balance this with the realities of consumer behaviour, economic conditions, and operational challenges, allowing for flexibility in recovery targets. Since KE is not financially supported by the GoP, unlike XWDISCOs, and non-provision of recovery gap allowance will significantly impact KE's ability to achieve future targets and execute its investments plans, therefore, keeping in view the ground realities and socioeconomic environment in which KE operates, KE has requested the Authority that the tariff should be based on the allowed recovery loss trajectory and KE should be compensated for legitimate costs related to recovery loss. In view of the environment in which KE operates and the challenges that it faces, KE requested NEPRA to have a realistic assessment of the benchmarks. In view thereof, KE, for the purpose of calculation of base tariff, requested that Recovery loss component be included based on amounts actually billed to consumers (including taxes paid on billing basis) and year on year recovery loss as a percentage for the next control period of FY 2024 to FY 2030. The Authority also noted that in case of XWDISCOs, although no recovery loss has been allowed, however, it is also a fact that the Federal Government under Section 31(8) of NIEPRA Act has the power to levy surcharges, to offset the inefficiencies of XWDISCOs arising from high losses and under-recoveries. However, no such option is available to K-Electric as it can only charge the regulated tariff. KE further submitted that recovery loss percentage being requested notionally assumes 100% recovery from Public Sector Consumers. Although there are delays in recovery from PSC consumers coupled with delays in release of Tariff Differential Subsidy (TDS) by the Government, the same is not being requested as it is separately being taken up with Government entities and departments. In case, the agreements with Government to streamline payment modalities do not materialize, KE reserves the right to request NEPRA for adequate compensation due to non-payment/delay in payments by Government entities In view of the case discussion, and to ensure sufficient liquidity in the power market, and to align the collection targets with current market realities, the Authority has decided to allow recovery loss to K-Electric as per the following targets for the Y1 control period from FY 2023- 24 to FY 2029-30; (i) 93.25 per cent in 2023-24, 93.60 per cent in 2024-25, 94.40 per cent in 2025-26, 95.19 per cent in 2026-27, 95.70 per cent in 2027-28, 90.10 per cent in 2028-29 and 96.50 per cent in 2029-30. Regarding mechanism to allow recovery of bad debts, the Authority observed that the relevant provisions of the NE Policy and NE Plan regarding the targets for collections and recovery of bad debts are as follows: NE Policy clause 5.3.2 stipulates that to 'ensure and put in place efficient tariff structures for sufficient liquidity in the power market, the target for losses and collections shall be revisited by the Regulator, in order to align the same with the current market realities. These targets shall be reflected in the determinations of the Regulator. Moreover, timely recovery of bad debt that is prudent shall be allowed by the Regulator with the incorporation of facilitative provisions in the regulatory framework as per industry practices and procedures.' Copyright Business Recorder, 2025
Hans India
27-05-2025
- Business
- Hans India
Rs 92 cr sanctioned for Dalit business units in Chittoor, Tirupati
Tirupati: State Madiga Corporation Chairperson Dr Undavalli Sridevi said that dalits are witnessing comprehensive development under the NDA-led government in the State. During her visit to Chittoor district on Monday, she addressed a press conference at the local SC Corporation office, accompanied by district Social Welfare and Empowerment Officer G Chinnaiah, Sridevi emphasised that both Madigas and Malas, two major Dalit communities have been progressing economically and socially through loans and support provided by the SC Corporation in Chittoor. She revealed that a total of 2,221 business units had been sanctioned with a financial outlay of Rs.92 crore, including 954 units in Chittoor district and 1,267 in Tirupati district. Additionally, she noted that there are currently 117 shops operated through the SC Corporation in Chittoor. Highlighting past government efforts, Sridevi pointed out that between 2014 and 2019, the state allocated Rs.40,000 crore for Dalit welfare from a total budget of Rs.7.5 lakh crore. During N Chandrababu Naidu's tenure as Chief Minister, from 2015 to 2018, the district saw an investment of Rs.242 crore that helped create employment opportunities for around four lakh youth through various initiatives. She acknowledged former minister Nara Lokesh's efforts in laying over 4,000 kilometers of CC roads, with a significant portion constructed in Dalit-dominated villages during his previous tenure as minister for rural development. Dr Sridevi also addressed the SC sub-categorisation, stating that it was carried out with the vision of equitable development for both Madigas and Malas, based on population proportions. She added that the Madiga community, in particular, has welcomed the move, viewing it as a long-awaited step towards inclusive growth.
