After considerable effort by the Goods and Services Tax (GST) council, GST has been ushered into India from 1 July 2017. At the time of writing this chapter, GST has been in operation for over 12 months. The new regime has faced a number of hurdles and has therefore needed some significant changes, spanning changes in rates of tax, changes in the forms and procedures for filing returns and introduction of new compliance-related features like the issue of an e-way bill for the transport of goods from one location to another. This chapter is an attempt to assess the performance of the GST regime in this one year. The economy has been subject to two major shocks in the past two years – the withdrawal of high value currency notes, otherwise referred to demonetisation, and the introduction of GST. Since it is rather early as well as technically difficult to disentangle the effects of these two effects on the economy, in the section titled ‘Likely Impact of GST’, an attempt is made to identify the kinds of effects change in the indirect tax regime could have on the economy. This is followed by a discussion on the impact of GST on revenues of union and state governments (section titled ‘Revenue Performance Under GST’). Finally, with GST bringing with itself a substantially different administration and compliance regime, the final section looks at some of the issues emerging out of the compliance framework for GST. Before exploring these issues, presented below is a brief summary of the key features of the GST regime in place today.
The key features of the GST regime implemented in the country on 1 July 2017 can be summarised as follows: