Announcement for GST changes in Budget-2021
Hemlata Khandelwal / 2021-02-25 11:15:50

Presenting the General Budget 2021, the Finance Minister said that with the simplification of the Goods and Services Tax (GST) process, there has been a tremendous recovery of GST in the last few months. However, she did not make any major changes to this tax system. The budget does not announce any major changes like reducing or increasing the GST rate, because only the GST Council has the right to change it. The government can make some changes in the process and law of the GST with the approval of the GST Council.

In January 2021, a GST of about 1.2 lakh crores was recovered. This is the highest in 3 years and 7 months after the implementation of GST. The government is facing a shortage of money due to the Corona epidemic due to increased recovery. Both GST and income tax are completely different types of tax. Income tax is levied on the income of a person or business, but GST is a tax levied on every transaction of a business.


  1. Rs 1.2 lakh crore recovered in January 2021
  2. This is the highest in the history of 3 years 7 months of GST.

These 8 big steps increased GST collection

The minister said that to simplify the process of GST recently, the government has taken these 8 major steps:

1. Nil returns from SMS :

        The GST Registration holder can file nil returns from SMS.

2. Quarterly returns and monthly payments for small traders

3. Electronic invoice system

4. The validated input tax statement

5. Pre-filled and correctable GST returns

6. Separate deferment to small and big businessmen for filing returns.

7. Increased capacity of GSTN system

8. Use of deep analytics and artificial intelligence to catch tax evaders and fake bill collectors

The government will remove the problem of inverted duty structure

The minister said that the GST process will be further simplified. The problem of inverted duty structure will be overcome. Federation of Indian Export Organization (FIEO) Director General and CEO Dr. Ajay Sahai said that the inverted duty structure charges more on cost and less tax on finished goods. For example, a company's raw material of Rs 100 charges Rs 10 at the rate of 10%. When she sells finished goods for Rs 150, she is taxed only 5 rupees at the rate of 5%. Now the company gets a refund of 7.5% input tax credit, but a tax refund of Rs 2.5 gets stuck. It meets once a year, but its process is complex. This outstanding refund is not available in the textiles sector. This causes loss to businessmen.

The trend of record recovery will continue in February and March

The total GST recovery budget estimate for this business year (April 2020-March 2021) was Rs 6, 90,500 crores. Rs 8, 99,730 crores has been recovered 2 months before the end of the year. Bimal Jain, chairman of the Indirect Tax Committee of the Ph.D. Chamber of Commerce and Industry, said that the GST collections could average Rs 1.2 lakh crore in February and March for the remaining two months of this business year. He said that increasing recovery also means that the country's GDP is increasing and the business sector is recovering from the shock of Corona.

The government missed the opportunity to improve

Anuj Gupta, deputy vice president of commodity and forex research at Angel Broking Ltd, said the government could have accelerated the economy by lowering the tax rate in aviation (aviation) and tourism (tourism) sectors. The common man would also benefit from this. Ajay Sahai of FIEO said that the Central Registration System could have been implemented. Currently, the company has to register in all the states it does business in. If there will be a central registration system with different codes of states, then only registration at one place will automatically register the company in all the respective states. Bimal Jain of PHD Chamber said that 5 petroleum products petrol, diesel, natural gas, aircraft fuel (ATF), and crude oil (crude) could be announced in a phased manner. The taxes that are being levied on them do not get credit for them. This increases the company's expenses. The price of products increases and the ability to compete is impacted.

GST came into force on 1 July 2017

The GST came into force in the country on 1 July 2017. Many indirect taxes of the Center and states have been merged into it. The GST has 5 different tax slabs - 0%, 5%, 12%, 18% and 28%. Petroleum products, alcoholic drinks, and electricity are excluded from its purview. A special rate of 0.25% has been kept on Rough Precious and Semi-Precious Stone and 3% on Gold. Cess has also been levied on certain items like aerated drinks, luxury cars, and tobacco products, with 22% or other rates above 28% GST. The GST rate, rules, and regulations of the GST decide the GST Council, which includes the Finance Minister of various states along with the Union Finance Minister.

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