In higher side. We also recommend a fair differentiation

In recent days government is facing a lot of issues in the GSTN portal. Tax payers are finding it difficult to upload their invoices and are unable to file their returns due to server issues. GSTR-2 which deals with the crucial invoice matching concept has been deferred right now. In this situation right now, government should concentrate on the better administration of the tax. And increasing the threshold limit for registration might be a step in the right direction. 1 (Rao, 2017)


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·       The threshold limit for registration though is ? 20 lakhs in some cases of e-commerce, reverse charge tax payers, interstate supply there is no basic threshold given. This might bring small and medium enterprises fall under the tax ambit even when the turnover < 20 lakhs.2 (Bird, 2005) ·       The definition of the term aggregate turnover includes exempt supplies which implies even if the major part of the supply is exempted but a mere small portion is taxable which less than ?20 lakhs is, the activity would require GST compliances. Hence exemption limit of ?20 lakhs is very low and the same needs to be pegged on a little higher side. We also recommend a fair differentiation in taxation framework between the small business, a startup and an established one. The threshold limit could be different for different segments based on the years of presence in the respective businesses. If the same threshold is continued it could lead to erosion of medium enterprises and could bring monopolistic market of large players instead of competitive market. ·       The compliance burden under GST is very high, a firm having its operations in multiple states will have to take state specific registration. Hence books of accounts will have to be maintained state wise and state wise return will have to be filed this makes compliance tedious. Earlier service providers had to file only two returns in a year with centralized registration (Pan India Basis). The government should work on bringing a Pan India registration for firms operating in multiple states. ·       The current return filing process under GST is completely online and hence burden falls on small businesses which are not tech-savvy till date. In most of the small businesses the proprietor himself takes care of accounts and taxation. Hence he will have to be educated regarding the new online return filing mechanism. Firms will also have to shell out money for setting up of IT infrastructure. ·       The reverse charge mechanism on purchases made by a registered person from an unregistered dealer has been deferred till 1st April 2018. If the scheme is implemented it might have serious consequences for small business. It can have two effects one being the firms registering themselves irrespective of the threshold limit which adds to the cost of compliance the other way being unregistered firms loosing their market share which leads to their decline.