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'Sinking hole of regulations': Mitra calls for simplification of GST system

Kolkata, January 20, 2023 

Describing the GST system and its complexities as a ‘sinking hole of regulations’, Amit Mitra, principal chief advisor to West Bengal Chief Minister, called for its simplification.

Mitra underscored his point with the number of times notifications and amendments in laws had been made. Truth has to be told and it is in the data, he said.

The number of notifications issued to date, Mitra said, was 741. Of this, central tax notifications stood at 395 and central tax rate notifications at 148. And the total number of prescribed forms in GST stood at 178. “Is this ease of doing business,” Mitra questioned while addressing a conference on GST@5.

The event was organised by West Bengal National University of Juridical Sciences (NUJS) in collaboration with All India Federation of Tax Practitioner, Eastern Zone (AIFTP-EZ), supported by the Finance Department, Government of West Bengal.

Pointing to the number of times the laws had been amended, Mitra said 65 sections and 129 rules in GST had been amended. And the rates of 419 items in goods were changed and 99 categories of services in GST. “Ease of doing business is a myth as far as GST is concerned,” he said.

“What worries me is that MSMEs are today deregistering. They can’t cope with this. And they are labour-intensive entities. With these kind of numbers, we believe they will go back to being informal,” Mitra said.

He said that there was little wonder that ‘fraud’ was happening. On fraudulent transactions, Mitra said, a presentation was made before the GST Council in March 2020 by Nandan Nilekani which amounted to more than Rs 70,000 crore. They were broadly under two heads: excess input tax credit fraud and under-declaration.

“We see massive fraud even after 2020,” he said, referring to a ministry of finance reply in the Rajya Sabha. The figure totalled Rs 55,575 crore

The solution to the complexities, according to Mitra, was not to use majoritarianism but to bring back the federalist spirit and consensus mechanism in the GST Council that was there in the first three years.

[The Business Standard]

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