Context:
The Finance Ministry must streamline the GST framework by eliminating unnecessary procedures that complicate compliance. A revamped GST 2.0 should be developed after stakeholder consultations to enhance efficiency.
Simplifying Return Filing & Compliance
- Consolidation of Forms: Reduce complexity by merging GST return forms.
- Lower Filing Frequency: Smaller businesses (MSMEs) should have fewer compliance requirements.
- Tiered Compliance Approach: Different rules for small businesses vs. large enterprises to reduce the burden on MSMEs.
Enhancing the GST Portal
- Improve user-friendliness by providing step-by-step guidance to taxpayers.
- Strengthen the digital interface to ensure a seamless filing experience.
Addressing Compliance & Registration Issues
- Harsh Penalties for Errors: Honest taxpayers face criminal penalties for unintentional mistakes—PAC urges more lenient measures.
- Aadhaar-Based Authentication Challenges:
- Technical issues hinder registrations, delaying the ‘One Nation One Tax’ vision.
- PAC calls for resolving authentication bottlenecks.
Boosting Revenue Collection with AI & Data Analytics
- Declining Indirect Tax Contribution: Dropped from 38.76% (2017-18) to 36.92% (2019-20).
- Leverage AI & Big Data:
- Predict tax revenues more accurately.
- Improve tax compliance tracking.
Transparent Refund Processing & Grievance Redressal
- Define Clear Refund Timelines: Faster and more structured claim settlements.
- Regular Status Updates: Taxpayers should be informed at each stage of refund processing.
- Dedicated Grievance Mechanism: A separate system to handle refund-related complaints efficiently.
MSME-Specific GST Framework
- Fast-Track Return Filing & Refunds: Automate processes to ease compliance.
- Reduce Filing Frequency: Allow MSMEs to file returns less frequently.
- Simplified Online Reporting: A user-friendly digital system for small businesses.
The PAC’s recommendations aim to simplify GST compliance, reduce procedural burdens, and enhance revenue collection through technology-driven solutions and structured reforms.
