We have had many changes since the GST roll-out on July 1 this year. It’s a new learning for government, exporters, traders, IT companies and others. Glitches will come, says Adhiya
The government will undertake a comprehensive exercise for any changes in GST (Goods and Services Tax) structure rather than going in for minor changes now, Revenue Secretary Hasmukh Adhia said on Wednesday.
Speaking at 'Ministerial Conclave – The Growth Debate' organised by Zee Business, Adhia said the government is willing to make course corrections to remove any glitches.
"We have had many changes since the implementation of GST across India from July 1 this year. In last meeting of GST Council, we allowed firms with Rs 1.5 crore turnover to file quarterly returns rather than monthly. Last week, the government also decided to increase the threshold for composition scheme to Rs. 1 crore from the present Rs. 75 lakh. All this was done to reduce compliance cost for small taxpayers," he noted.
"It's a new system, it's a new learning for government, exporters, traders, IT companies and others. Glitches will come. GST was not implemented in a hurry," he said, adding that the government had expected some initial difficulties.
With any structural reform, there will be a short term pain, Adhia cautioned, pointing to the introduction of Value-Added Tax earlier in India, and Obamacare universal healthcare insurance in the US that took about a year to settle in.
"We have to be ready for short term pain. Next one year, everything would be back on track. There is nothing to worry, government is willing to take course correction," Adhia said.
Currently, the number for tax collections after the GST is not showing any trend as major numbers are for iGST, but once it starts to translate into CGST and SGST, then we will get to know an exact picture, he clarified.
For the month of August, the government collected Rs 90,669 crore GST compared to Rs 94,063 crore collected in July. Only 55 per cent of assessees paid taxes for August, compared to 64 per cent for July.
"A revenue trend will emerge only after 6 months. A buoyancy will come after some time. Also, the rate of compliance is currently low. We are also looking to find reasons for low compliance," Adhia said.
About 72 lakh taxpayers have migrated to the new regime and 26 lakh new taxpayers have registered. When all file their tax returns, then we will get to know revenue collections, he said.
The Revenue Secretary also said the government has got hold of rich data after the demonetisation exercise announced last year.
"We will scrutinise the data that has come after the demonetisation exercise. A scrutiny will be done, for which a period of two years is there, and then a notice will be sent if required. Tax liabilities need to be ascertained seeing the returns filed and amount deposited in the bank accounts during demonetisation," he said.
Adhia also noted that the gains of demonetisation would only be known after some time.
"No revenue target has been fixed for this year, so we can't say whether we will achieve it or not, but we should be able to register a growth if 8-9 per cent for indirect tax collections," he added.
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