The 2024 Interim Union Budget presents a comprehensive overview of the Goods and Services Tax (GST), a cornerstone of India’s tax system. Designed to streamline indirect taxation, GST aims to create a unified market across the country by replacing multiple taxes levied by the central and state governments.
In the latest budget, the government continues its commitment to enhancing the effectiveness and efficiency of the GST regime. Key highlights include:
Tax Rate Adjustments: The budget may include updates on any adjustments made to GST tax rates for various goods and services. These adjustments are often based on economic conditions, revenue requirements, and government policies aimed at promoting specific industries or addressing consumer needs.
Compliance Measures: The government is likely to announce initiatives to simplify GST compliance for businesses, reducing the burden of tax administration. This may include improvements to the GSTN (Goods and Services Tax Network) portal, clarification of tax procedures, and measures to enhance taxpayer education and awareness.
Sector-specific Reforms: The budget could unveil sector-specific reforms aimed at addressing challenges faced by industries in complying with GST regulations. This may involve tailored tax incentives, exemptions, or other measures to support sectors such as small businesses, exports, and manufacturing.
Digital Transformation: Emphasizing the government’s commitment to digital governance, the budget may outline plans for further digitization of GST processes. This could involve the implementation of advanced technologies such as artificial intelligence, data analytics, and blockchain to improve tax administration, curb tax evasion, and enhance taxpayer services.
Cross-border Trade: Given the importance of international trade, especially in the context of global economic dynamics, the budget may introduce measures to simplify GST compliance for cross-border transactions. This could involve aligning GST regulations with international best practices and streamlining customs procedures to facilitate smoother trade flows.
Revenue Projections: The budget is expected to provide insights into revenue projections from GST collections, reflecting the government’s fiscal outlook and its implications for overall economic growth and development.
Future Roadmap: Lastly, the budget may outline the government’s vision and future roadmap for GST reform, highlighting key policy objectives, legislative changes, and strategic initiatives aimed at further enhancing the effectiveness, transparency, and fairness of the GST regime.
Key Highlights of Budget 2024:
1. The Finance Minister proposes maintaining current tax rates for indirect taxes and import duties.
2. GST successfully unified India’s previously fragmented indirect tax structure.
3. This year, average monthly gross GST collections have doubled, reaching Rs 1.66 lakh crore.
4. The GST tax base has doubled.
5. Post-GST, State SGST revenue buoyancy rose to 1.22 from 0.72 pre-GST.
6. 94% of industry leaders affirm the transition to GST positively.
7. GST has optimized supply chains.
8. Implementation of GST has reduced the compliance burden on trade and industry.
9. Decreased logistics costs and taxes lead to lower prices for goods and services, benefiting consumers.
10. Amendment to Section 2 defines Input Service Distributor and mandates compliance with Section 20 for tax credit distribution.
11. Section 20 substitution outlines tax credit distribution by the Input Service Distributor (ISD).
12. Addition of Section 122A imposes a ₹1 lakh penalty per unregistered manufacturing machine, with seizure allowed until the penalty is paid.
Budget 2024: GST Rates
The finance minister stated that rates of indirect taxes and import duties remain the same. It applies to GST rates as well. Below, we have given the existing GST rates for various goods and services Categories.
| GST Rate | Description | Examples |
|---|---|---|
| 0% (Nil Rated) | Goods and services exempted from GST | Fresh fruits and vegetables, non-AC hotel accommodation (up to ₹1000 per day per unit), exports |
| 0.25% | Textiles | Fabrics, yarns |
| 3% | Gold | Gold jewellery, bars, coins |
| 5% | Essential items and services | Processed and packaged food items, milk, curd, newspapers, books, hotel accommodation (₹1000-₹2500 per day per unit), transportation services |
| 12% | Most processed goods and services | Clothing, footwear, soaps, detergents, restaurants (excluding AC restaurants), movie tickets (up to ₹100), business class air travel |
| 18% | Most general goods and services | Electronics, appliances, furniture, household items, AC restaurants, movie tickets (above ₹100), economy class air travel |
| 28% | Luxury goods and services | Luxury cars, betting and gambling, pan masala, aerated drinks |
Overall, the 2024 Interim Union Budget’s overview of the Goods and Services Tax reflects the government’s commitment to fiscal prudence, economic growth, and inclusive development through continuous improvement and refinement of India’s indirect tax framework.