Indirect Taxes
INDIRECT TAX REFORM Indirect taxes need to be reformed. Most businesses (especially MSMEs) are crippled by a poorly designed indirect tax regime. The situation today is that of reform in process. But the view from the MSMEs is that the reform process has slowed down. GST GST is here and is here to stay. Nothing wrong with that, every country in the world needs a good indirect tax system. The question we have to ask ourselves - is our GST system good or can it be made better? A major issue that creates discord is the ITC or Input Tax Credit. This issue can be solved by having an automatic invoice matching system. A simpler solution would be for every party to feed in sales invoices only. The system can then allot the ITC based on the customer's GSTIN. Sounds complex but in reality it's a simple software solution to an annoying issue. This was proposed in the original GST draft. Why was it removed or discarded? Another change that can be made is to have an accrual