5. Taxation - AW Flashcards
(16 cards)
What is GST and why was it considered the most significant indirect tax reform in India?
GST is an umbrella, multistage, destination-based indirect tax regime that subsumed various taxes like central excise, service tax, VAT, etc. Launched on 1 July 2017, it was hailed as the biggest indirect tax reform due to its comprehensive structure and envisaged impact.
GST aims to streamline the taxation process and create a unified market across India.
What are the key positive outcomes of GST since its inception?
Key positive outcomes include:
* Doubling of registered taxpayers to 1.4 crore by June 2023
* Gross monthly collection increase to 1.68 lakh crore in 2023-24
* Removal of cascading effect
* Technology-driven compliance
* Ease of doing business
* Elimination of tax multiplicity
* Movement towards ‘One nation One tax’
* Elimination of state check posts
* Behavioral change
* Cooperative federalism via GST Council
These outcomes reflect the positive impact GST has had on the Indian economy and taxation landscape.
Cloze: The number of taxpayers registered under GST has more than doubled to ____ crore by June 2023.
1.4 crore
This reflects the growing compliance and acceptance of the GST system.
Cloze: Gross monthly GST collection increased to ____ lakh crore in 2023-24 from less than 1 lakh crore in 2017.
1.68 lakh crore
This significant increase indicates improved tax compliance and economic activity.
Cloze: GST was launched on ____ (date).
1 July 2017
This date marks a pivotal change in India’s tax structure.
List all the key keywords and boxed terms related to GST performance and reforms.
Keywords:
* GST
* indirect tax
* destination-based
* cascading effect
* GSTN
* e-filing
* faceless regime
* ease of doing business
* One nation One tax
* e-waybill
* cooperative federalism
* GST Council
* compensation
* slabs
* compliance cost
* GSTN gaps
* fake invoicing
* ITC scams
* GST Council secretariat
* digital infrastructure
These keywords encapsulate the essential aspects of GST’s framework and operational challenges.
What are the main issues where GST has not met expectations? (Bullet points, keywords only)
Issues:
* Loss of state autonomy
* GST compensation delays
* Federal tension, legal disputes
* Multiple tax slabs, items outside GST
* High compliance cost for small businesses
* Gaps in GSTN, fraudulent practices
* High rates incentivizing evasion
These issues highlight the challenges faced in the implementation and governance of GST.
What are the main reforms suggested to improve GST performance? (Bullet points, keywords only)
Reforms:
* Independent GST Council secretariat
* Reduce tax slabs
* Bring more items under GST
* Enhance digital infrastructure and services
These reforms aim to address the shortcomings in the current GST framework.
What is the way forward for GST in India? (Bullet points, keywords only)
Way forward:
* Strengthen cooperative federalism
* Simplify tax structure
* Improve compliance and digital systems
* Address state concerns and compensation
These steps are crucial for the sustainable growth and effectiveness of GST.
List 4-5 value addition points that provide an edge in understanding GST’s performance and reforms.
Value addition points:
* Doubling of taxpayer base
* Technology-driven compliance
* Cooperative federalism model
* Persistent federal tensions
* Need for simplification and digital upgrades
These points summarize the strengths and ongoing challenges related to GST’s implementation.
What are the main reasons for low direct tax compliance in India?
Main reasons include:
* low tax morale due to poor governance,
* lack of accountability,
* mild punishment,
* high cash transactions in the informal economy,
* prevalence of black money,
* untraced transactions (hawala),
* weaknesses in tax laws,
* tax avoidance by MNCs,
* lack of administrative expertise/resources
* collusive corruption.
These factors contribute significantly to the challenges faced in tax compliance.
Cloze: Out of 7.4 crore people who filed income tax returns in 2022-23, only ____ crore or ____% of the adult population actually paid income tax.
2.24 crore; 2.2%
This statistic highlights the low percentage of taxpayers among those who file returns.
What are the main solutions to improve direct tax collection in India? (Bullet points, keywords only)
- Rationalize tax structure,
- Judicial reforms,
- Improve tax administration with technology,
- Reduce disputes,
- Tax rich farmers’ agri income,
- New models: equalization levy, digital tax, global minimum tax.
These solutions aim to enhance compliance and collection efficiency.
What is the way forward for widening the tax base in India? (Bullet points, keywords only)
- Increase female labor force participation,
- Promote formalization of the economy,
- Expand tax base in the long run.
These strategies are essential for sustainable tax revenue growth.
List all the key keywords and boxed terms related to direct tax compliance and collection in India.
Keywords:
* direct tax,
* income tax,
* progressive tax,
* tax compliance,
* tax morale,
* informal economy,
* black money,
* hawala,
* exemptions,
* BEPS,
* tax administration,
* AI,
* Big data,
* equalization levy,
* digital tax,
* global minimum tax,
* female labor force participation,
* formalization.
Understanding these terms is crucial for grasping the complexities of tax compliance.
List 4-5 value addition points that provide an edge in understanding direct tax compliance and collection in India.
- Highlights global comparison of tax base,
- Emphasizes technology in tax administration,
- Recognizes informal sector’s impact,
- Suggests new tax models,
- Links gender and formalization to tax base.
These points enhance the understanding of the broader implications of tax policy.
