Key Takeaways:
- The GST-based indirect tax system in India is based on various unified and state taxes.
- Most businesses enjoy interstate trade, as GST is eliminated to facilitate a national market without check-post barriers.
- Tax compliance is increasingly digital, fulfilling e-invoicing, e-filing, and automated systems by reducing paperwork.
- Accounting jobs require compliance experts, GST specialists, and tech-savvy professionals.
- Businesses enjoy easier trade with the elimination of GST, which helps in managing check-post barriers to maintain a national market.
India embarked on an ambitious project to manage its history. The introduction of the GST simplifies the complex web of taxation, similar to VAT. There are other components, such as service tax and excise duty, which are part of GST.
Eight years later, GST has transformed the taxation, economy, employment landscape, and accounting framework. In this article, we discuss the impact on India’s tax system. In the accounting job market, taxpayers highlight both the challenges and the achievements that remain.
Challenges Involved with GST and Other Taxes
Several aspects are involved in GST accounting. Have a look at the following ideas:
Increased Compliance and Transparency
The primary objective of GST is to broaden the tax base. It reduces tax evasion. These types of things can measure the following aspects:
- Input Tax Credit (ITC) – ITC manages the actual tax payments.
- E-Invoicing – For managing larger business operations, e-invoicing is crucial.
- Input Tax Credit (ITC) – The ITC system links the credit with the tax payments.
GST has introduced transparency in tax reporting. The digital-first approach reduces the opportunities for manipulation by raising the necessity. If you manage the requirement, it can help in dealing with the business plans.
2: India and GST Tax System with the Uniformity to Complexity
Before the introduction of the indirect tax structure in India, the multi-layered and fragmented system was based on the Value Added Tax (VAT). Some tax rules are based on service tax, excise duty, and other levies. Businesses are based on several key points that create a cascading effect on taxes. With the GST based on the entire framework, on the following:
- State GST (SGST) – The centre of the intra-state supplies collects the tax.
- Central GST (CGST) – the state collects CGST on intra-state supplies.
- Integrated GST (IGST) – This type of tax is collected on the inter-state supply level.
Uniformity is achieved by reducing disputes over overlapping taxes and conflicts between states. In the Indian single market, you should boost interstate commerce.
3: Business Impact: Challenges and Opportunities
GST tax and business are based on a double-edged sword. The tax condition eliminates the hassle of paying state-specific returns and multiple taxes by dealing with the check-post and border. On the other hand, the tax compliance under the GST requires the business to deal with the following aspects:
- Maintain the complete transaction record
- Deal with various monthly returns
- Reconcile regularly with invoicing to claim ITC
The big companies adopt the ERP systems for small and medium-sized enterprises (SMEs), which can facilitate the government support. It is also based on the digital compliance with the smooth transition.
4: Consumer Benefits
Consumers experience significant changes due to the introduction of the GST. The cascading effect on taxes reduces with the tax burden on services and goods. This is predictable with the low tax rates. Here are some examples:
- The sin and luxury goods attract the higher GST rates
- The essential items are based on low-rate management of food grains
The structure ensures fairness in taxation by aligning with the nature of consumption.
5: GST Roles in Boosting Revenue Collection
Despite initial disruptions, GST has shown significant consistency, crossing the ₹1.5 lakh crore mark. This reflects expanded economic activity and better compliance with various activities. This is stable with the revenue stream that is allowed for the government to manage the following factors:
- Reduce the older tax dependency and models
- Manage the investment in the infrastructure.
- Deals with the fund’s welfare schemes
The stable revenue stream allows the government to manage various functionalities as follows:
- Invest in the infrastructure
- Manage fund welfare schemes
- Reduce dependence on the tax models
6: Rise of GST in Finance and Accounting
The most profound effects on GST that is based on finance and accounting jobs in India. Have a look at the roles:
1. Upskilling Needs
There are some essential job roles, such as Cost Accountant, Chartered Accountants (CAs), and tax consultants, that require reskilling for relevance in the GST era. Knowledge of software tools, GST law, and data analytics is a crucial component of a business.
2. New Career Roles
The complex compliance with GST is based on the professional skills that are based on the following:
- Advisory Services and GST Audit
- Input Tax Credit Reconciliation
- Compliance and E-Invoicing Technology
- Return Management and GST Filing
3. Opportunity for the Fresher
From accounting and commerce graduate students, GST opened up new opportunities with GST executives. Compliance officers are responsible for managing reporting and filing.
4. Demand for the Tech-Savvy Accountants
GST compliance is a key component of digital accounting, utilizing expertise in SAP, Tally, QuickBooks, Zoho Books, and GST-specific software, which is in high demand now.
7: Criticism and Challenges of GST
GST is transformational. But there are some critical challenges as follows:
- Frequent Policy Changes: Regular updates on the rates and rules create confusion regarding policy changes.
- Compliance with Complexity: Despite its simplicity, there are several returns each month, which can be a burden at times.
- Delay in Refund: Exporters face challenges in managing GST refunds due to cash flow issues and other factors.
- SME struggles: For smaller businesses, several challenges arise from a lack of awareness.
These issues underscore the need for ongoing improvement in GST implementation.
8: Indian Workforce and GST: Manage the Broader Impacts
GST influences the way some accountants manage the entire business workforce. Have a look at the positive impacts:
- E-commerce platforms align with GST, leading to a demand for managing compliance specialist tasks.
- The logistics industry is beneficial in removing interstate barriers. This can help create jobs in the supply chain management.
- E-commerce platforms align with the GST to manage compliance based on current actions and major functionalities.
Thus, GST spurs the job creation to reshape professional skills properly.
9: Digital Transformation of India on GST
The most significant contribution of GST is its push towards India’s digital-first tax ecosystem. Here are factors that lie with the digital transformation, such as:
- Most businesses should generate GST-compliant invoices
- Paying taxes, filing returns, and claiming ITC online are part of the digital transformation.
- The government of India utilizes an AI-powered system to track mismatched tasks and curb fraud.
Digitization is based on the Indian tax system to manage the modern, efficient, and data-driven dependency with manual processes.
10: Future of GST in India
If you are looking ahead to the GST, this can move further with the following terms:
- Expansion of GST to include electricity, petroleum, and alcohol under GST.
- Simple return filing process for reducing the compliance burden
- Greater integration with analytics and AI to detect fraud
- Get career opportunities for managing GST advisory, international taxation, and compliance technology.
A transparent, modern, and digital tax system facilitates the maturity of GST.
Final Thoughts
After eight years of GST, India has managed to creates a uniform, transparent, and digitally advanced taxation landscape. To manage frequent changes and ensure compliance, it is essential to restructure the accounting roles and responsibilities. Every department needs to pay tax and meet various challenges. It can be solved with the help of legal rules.
Frequently Asked Questions
When was GST introduced in India?
GST was introduced on 1st July 2017. It involved replacing multiple indirect taxes with a unified tax system.
What is the impact of GST on small businesses?
GST simplified taxes in some businesses with digital filing with the help of the government.
Has GST increased the tax revenue in India?
Yes, GST collection has increased the revenue of both the states and the centre to manage accounting.
Which role does GST play in the digital transformation?
GST has introduced e-invoicing, online filing, and e-way bills for pushing the business towards digital compliance. This can help maintain manual intervention.
What is the effect of GST on accounting jobs?
GST created demand for compliance, professional skills, auditing, filing, and software tools transformation. It is the fundamental part of the tech-driven field.
What is the future of GST in India?
The future of GST includes simplified returns for tax management of alcohol and petroleum. The deeper integration of technology improves compliance and reduces fraud.