As of July 1, the GST Council is likely to be in a “reluctant” position to introduce any new tax regime, as it is unable to pass legislation in the Budget for the first time.
However, it has announced plans to “revamp” the tax system in a bid to make it fairer.
It is yet to decide how it will do this, with several experts arguing that the GST should be reformed in a way that minimises the impact of the new tax.
However one major question that remains unanswered is the impact on the GST.
As the GST is supposed to be rolled out in phases, the tax rate of individuals, companies and trusts is set to be set at 25 per cent.
However the Council has not decided whether this will apply to individuals, trusts or companies, or the total amount of GST that individuals, corporations and trusts will be allowed to claim.
There are also other hurdles that need to be cleared before any tax reform could happen.
For example, there is still no clarity over the definition of a business.
The GST Council, which has so far been in a reluctant position, has not specified a definition for GST.
In addition, the Council needs to find a mechanism for allowing individuals to claim GST benefits, a concept that was only raised in the 2016 Budget.
Finally, there are other hurdles to clear before the Council can implement any tax reforms.
For instance, the Goods and Services Tax (GST) has to be introduced on a phased basis in the coming months.
The Council has proposed an expedited tax regime for the GST, but there is no clear timeline or any clear direction as to how it would be implemented.
In the meantime, many are questioning how the GST would work in a country where almost all transactions are done online.
Will it work well, or will people continue to use the old ways of doing business?
The GST has also faced a slew of problems in India, with the Council not being able to find consensus on the tax regime.
While some countries, including Japan and Canada, have moved to simplify their tax structures, the G20 countries, which include India, have not done so.
The G20 Council is now being asked to make some adjustments, as well as take the necessary measures.
While the GST will soon be rolled-out across the country, the final decisions on the reform of the GST are yet to be taken.
How can you claim GST?
A tax lawyer in New Delhi who spoke to Mint said, “The GST is being used for a very wide range of purposes.
The basic income tax has been used to pay for the healthcare, education and so on.
But there is a huge variety of ways of getting GST.
If you use it for any purpose, then you have to file the tax return.
You have to declare the amount of the benefit, whether you pay it or not.
If your beneficiary is a company, it will be tax-free, so that is not a problem.”
The GST will be available for tax-exempt businesses, which can claim tax relief of up to Rs 1 lakh.
It will also be available to individuals for income-tax purposes.
It has been estimated that about a billion individuals and corporations will get GST benefits.
If this figure is taken into consideration, then it can be said that about 20 per cent of the population will benefit from the tax reform.
This means that about 30 million people will benefit in the next two years.
According to the official figures, around 20 crore households will benefit as of July 2018.
However it is unclear how many of these households will be able to claim the benefit.
There is also uncertainty as to when the new GST will go live.
It could take anywhere from a month to three months for the Council to make a final decision on the new rate of tax.
On July 1 of next year, the country will be expected to start filing tax returns and paying their taxes.
What happens if you do not claim GST from your business?
As the tax base for GST will not be the same across the land, it is important that businesses can claim GST and the government will be forced to collect the tax from them.
The first hurdle is that there is uncertainty about whether or not businesses will be willing to claim tax benefits for GST-related services.
Some business owners, like the owner of a food stall, said,”I would not want to be an importer.
It would be unfair to me if I had to pay GST on my goods to the government.”
Another business owner, who did not wish to be named, said that, “I don’t want to have to pay any GST at all.
If I am forced to pay, I will not have any tax benefit.”
What happens to the tax you pay?
There is a lot of uncertainty about the way that businesses will treat the GST-based tax benefits they get