New Delhi, July 2 (KNN) On the second anniversary of GST, Former Finance Minister has penned down a post on Facebook on how the GST has merged all the seventeen different laws and created one single taxation in the country.

Arun Jaitley said, “Earlier, the States had multiple laws which entitled them to impose taxation at different points.  There were challenges like, to get the States to agree as some of them felt they were losing their fiscal autonomy to tax and to develop a consensus in the Parliament”.

The GST merged all these seventeen different laws and created one single taxation.  The pre-GST rate of VAT was 14.5%, excise at 12.5% and added with the CST and the cascading effect of tax on tax, the tax payable by the consumer was 31%.  Entertainment tax was being levied by the States from 35 percent to 110 percent. The assesses had to file multiple returns, entertain multiple inspectors.

Today, there is only one tax, online returns, no entry tax, no truck queues and no inter-state barriers.

Minister said, “The last two years have seen each of the meetings of the GST Council reducing the tax burden on consumers as the tax collections improved. The 31 percent tax, which was temporarily 28 percent, has seen the largest single reform.  Most items of consumer use have been brought in the 18, 12 and even 5 percent category. Cinema tickets, which were taxed at 35 to 110 percent, have been brought down to 12 and 18 percent respectively.  Most items of daily use are in the zero or 5 percent slab.  The loss to the revenue on account of this reduction collectively has been more than Rs. 90,000 crore annually”.

Jaitley added, “Earlier, number of assessees covered by the GST was around 65 lakh.  Today, they are at 1.20 crores.  This obviously leads to higher revenue collections.  In 2017-18 (July to March), the average revenue collected per month was Rs.89,700 crores per month.

In 2018-19, the monthly average has increased by about 10 percent to Rs.97,100 crore.  The fear of the States today is that for the first five years they get a guaranteed 14 percent increase.  After the second year, twenty States are independently showing more than a 14 percent increase in their revenues and the compensation fund in their case is not necessary”.

Businesses up to an annual turnover of Rs.40 lakh are exempted from GST.  Those with a turnover up to Rs.1.5 crores can make use of the composition scheme and pay only one percent tax. There is now a single registration system which works online and the procedures for the trade and business are reviewed and simplified regularly.

“In the pre-GST regime, the rich and the poor, on various commodities, paid the same tax. The multiple slab system not only checked inflation, but it also ensured that the Aam Aadmi products are not exorbitantly taxed. Zero and 5 percent slabs will always remain.

As revenue increases further, it will give an opportunity to policymakers to possibly merge the 12 percent and 18 percent slab into one rate making effectively the GST a two-rate tax," he added further.