On the second anniversary of Goods & Services Tax (GST) on July 1, the finance ministry will come up with some reforms in the indirect tax regime including new return system, rationalisation of cash ledger system and a single refund-disbursing mechanism, among others. It noted that GST is a game changer for the Indian economy as it has replaced multi-layered, complex indirect tax structure with a simple, transparent and technology-driven tax regime.
The ministry will introduce the new return system on a trial basis from July 1 and on mandatory basis from October 1. It also said that with regards to single cash ledger, the government will rationalise the ledger in such a manner that earlier 20 heads are merged into 5 major heads. There is only one cash ledger for tax, interest, penalty, fee and others. It noted that a single refund-disbursing mechanism will come into play wherein the government which sanctions refund disburses all four major heads of refunds namely CGST, SGST, IGST and cess.
According to the ministry, threshold limit of Rs 40 lakh is offered of suppliers of goods as per the choice of states. It also said that introduction of composition scheme for small service providers up to an annual turnover of Rs 50 lakh with a tax rate of 6 percent, electronic invoicing system in a phase-wise manner for B2B transactions is proposed to be introduced and GST Appellate Tribunals are being established at various state headquarters and area benches also.
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