GST or the Goods and Services Tax was implemented amid much fanfare by the government in July 2017. It was hailed as a major game-changer in the goods and services tax industry. It is the single-biggest tax reform undertaken in the country since independence.
However, GST had also had its fair share of criticism. GST brought in new rules and regulations that seemed to be too stringent for small and medium-sized enterprises. Many traders complained that GST caused much distress to their businesses as they were ill-equipped to comply with the complicated provisions of the new regime.
On the other hand, admirers of the new tax regime argued that GST has streamlined the tax collection process and have strived to formalize the economy.
All these opinions and counter-opinions will be evaluated when the Comptroller and Auditor General (CAG) of India conducts the performance audit of GST.
The CAG report
It is believed that the CAG will be conducting the performance audit soon and that the report may be tabled at the forthcoming Winter session of the Parliament. The functioning of the GST regime will be scrutinized since its implementation on the 1st of July 2017.
Areas covered under the audit include the refund, input tax credit, transition credit mechanism, ease of payment of taxes, registration and impact on economic activity.
Focus on implementation
A team from the CAG’s office has already visited GST Commissionerates in important cities to gauge the effect of the implementation of the new tax regime. The CAG has especially focused on the systems, activities and programmes of the new tax regime to ascertain whether they are feasible and if they can be improved any further.
However, the CAG’s report will not focus on revenue collection as its focus would mainly be on the implementation aspect of GST.
It should be kept in mind that the GST framework had to face some critical problems in the initial phase of its implementation.
It is to be seen whether the CAG’s report acknowledges the government’s claim that GST is the best thing to happen to the Indian economy in recent years or contradicts it.
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