Known as one of the most substantial tax reforms during Modi’s government, GST came into the picture to shape a myriad of individual tax routines. While the aim here was to devise a policy that entails a defined structure of tax levied on goods and services, has GST kept its promises?
With a surge in the country’s first cash crunch, this bill further brought teething difficulties for businesses (particularly small and medium-sized) to keep up with this confusing reform. However, this doesn’t mean there aren’t any benefits of GST, but it’s crucial to narrow down to its anomalies too.
The biggest confusing aspect of GST was that it entered the Indian taxation system during the beginning of July. That means businesses had to follow the old system for the first three months (April–June) of the financial year, 2017. And for the second half, the billing system had to be suddenly changed to GST compliant ones.
As a result, businesses became liable to obvious confusion and compliance issues while moving from the existing tax regime, that too, in the middle of a financial year.
Another issue with this GST reform was that hiring tax professionals no longer remained a skippable choice. The amount of confusion put aside the option of carrying out the complicated taxation process on an individual level.
Subsequently, keeping the business capital within a specified budget became challenging for business firms. At the same time, adequate training needed to be there for existing staff so that they can get along this reformed taxation system. This, in no way, was a cost-effective measure by the government even though the objective was to unify the tax regime to prevent businesses from overhauling and diversified taxes.
Since previous billing software could no longer be utilized, business enterprises had to adopt updated ones. This meant additional and inevitable costs that even small companies had to endure to keep up with the GST regulations.
Not everyone in the industrial world is well-versed with technology, which makes it arduous for business to keep running without hassle. If someone had recently invested in a taxation system, they were to again bear some expenses in order to be GST-compliant. Although the government might still be making suitable changes to ease the process, GST is still as tricky as always.