Finance

How GST Converter eliminates the Monotony of the New Taxation Regime?

It has been a year since the Goods and Services Tax Act has come into effect in India. Besides the complex nature of the regime, more than 1.03 crore businesses registered under GST. The new taxation regime is the most complex process with the highest tax rate. The World Bank has recently released a document in which the most India is amongst the five countries which have multiple tax slabs. The other four countries using more than four taxation slabs are Pakistan, Ghana, Luxembourg, and Italy.

However, the process of the Goods and Services Tax has been made easy not by any miracle but the technology.  The IT sector of India addressed to the taxation problems of the people developed a potent and unassailable tool that now helps millions of taxpayers in India. Stating the obvious, the technology has been an asset for a developing nation like India. Many of the economic sectors like education, agriculture, banking etc. upgraded to a whole another level with the integration of technology. Similarly, it also made the overall compliance of the regime simpler.

The phenomenal endeavors

The main reason behind shuffling the earlier taxation regime with the Goods and Services Tax Act was the arising tax evasion measures and reducing revenue collections. Initially, there were several disruptions in the taxation regime as the taxpayers were entangled in the multifarious return filing mechanism and chaotic tax slabs. Here’s how the GST converter eased out the complicated GST processes:

  1. Systemized tax calculations– The calculation of the Goods and Services Tax highly consumes both the time and money. As all the goods and services are under the effect of GST, the taxpayers are baffled in finding the correctly applicable tax slab in the transactions they make. And the entire process takes the valuable time of the businesses that make it compromise with their core competencies. On the other hand, using the tool helped each taxpayer to calculate the tax easily.
  2. Registrants turned into filers– Initially when the regime rolled-out, the businesses were getting registered under the regime only due to the government’s coercion. But it was even difficult for the government to turn the registrants into filers. The taxpayers found ease in using GST converter for the taxation processes. A few months later the rollout of the regime, the government experienced a considerable hike in the numbers of return filers. That particular hike in the number of filers also helped in increasing the tax revenue.

Varying point of view

Even though the regime is getting easier for the people to comply with, there are still some intricacies that prevail the entire regime. The taxpayers, in order to file returns, are supposed to match their invoices of inputs and outputs. As per the government records, the economic activity would also be affected due to the slow tax refunds. And these problems result in the high-compliance rate. However, these problems could only be put to an end when a structured administration of the taxes, especially refunds would be integrated with the regime.

The government is required to advocate multiple and engaging communications strategies to disclose the exclusive aspects of GST to the businesses. According to a survey, there are still thousands of businesses in India unaware of the basics of GST. These businesses, if made aware effectively about the regime, would result in the increased tax revenue collection. The key intermediaries of the taxation system have to deliver an unaltered procedure that could give the businesses an additional edge to comply with the regime.

Summary

As of now the major problem that needs to be resolved is of input tax credit. Most of the businesses are not being able to carry forward their business processes due to the insufficiency of the working capital. The GST converter is performing well to cope up with the taxation regime. Simultaneously, the government should also take measures to clearly separate the chunk of incorrect filers from the correct ones. And once the regime gets backed up with a seamless tax processing strategy, the future benefits of the regime will outcast its present cost and time consumption.