Remove Input Tax Credit

Every coin has two faces. GST has no exception. Earlier, there was so many flaws in Service Tax, & Sale Tax/ Trade Tax also. What is the need of the time that the tax system should be simple, easy to understand, and trade friendly. It does not matter, what is its name, the important thing is, how it is simple and affordable by all segment of the society. I suggest that there should be only three slabs, i.e. 2% on eatables and restaurants; 5 % on all services except luxury items and 10% on luxury items and hotels having 4 star and above facility. Government should prepare mechanism which ensure that there should be no transaction without GST. It has also been observed that the traders are collecting the GST from the consumer and not depositing it. A mechanism should be developed to control this kind of Tax evasion. more  

I too agree with continuation instead of various tax laws. However, it require: 1. Rationalisation of tax rates, especially on items like Insurance. Even a central minister also commented and suggested means we can understand the gravity of he impact. Must Rationalise. 2. To avoid fraud in ITC, I suggest ITC to be credited only after payment of invoice initiator. Hope this will eradicate this issue as they can not claim without payment at initiator. more  

GST is killer in India, God save poor Indians. more  

This is probably the third time this gentleman has raised this topic. It’s a pity that he has not checked out the genesis of GST versus other taxes in the past. He has cherry-picked restaurant service without realising that prices at restaurants went up after that change. GST brought with it uniformity across the nation, and it can be argued if that was right or not. Every tax system will have evaders and people trying to beat the system. That has to be addressed by a robust system that enforces and closes loopholes. GST input tax credit is not flawed and nor are a sizeable number of people abusing it. Many of the numbers quoted/released by tax authorities are high-pitched numbers including projected numbers with penalties, interest etc. We are talking of around Rs 24 lakhs of GST collections per year (and growing) in value in FY 24-25. The figure quoted in this post is less than 2% of that. It is not so significant to scrap something and assume that the new system will be abuse-free. It is like saying ban the internet on mobile phones or banking applications as some people commit fraud. Many a time the so-called abuse of ITC is often an issue of a lapse in process or documentation which may not be intentional, or it could be an aggressive interpretation of tax laws. All cases of ITC abuse are not fraudulent. Rather, a more humane system that cuts down cascading taxes is needed. They can ensure better measures to cut down the multiplicity of rates, moderate certain rates that are pain points etc. Only today a colleague mentioned that in the 7 years of GST law, thousands of notifications have been issued and all of them together weigh over 80 kgs in paper so far!! It speaks volumes how the GST law was pushed in and corrections are made over time. Who will keep track of an ever-changing law? A stable tax regime will be fundamentally more resilient. Even GST officials are unaware of many notifications and circulars, and they expect a person to do business or focus on knowing the law completely. So, if there is evasion and fraud, the government should be the first to take responsibility and try and fix such issues. Otherwise, we will have food at a restaurant being taxed at 5% and at a five-star hotel/mandap/outdoor catering/ hostel at 18%. Try the Malabar Parotta or a frozen pizza. Someone said it should be taxed at 5% and someone 18% - even GST officials are unclear. more  

The whole purpose of gst will be defeated if input credit is denied.fake gst accounts should be detected and weeded out using strict verification.one problem also was the transitory provisions which allowed unquestioned credit when GST was introduced more