A Case Study On GST Collections In The Midst Of Budget 2018


March 30, 2018

Case Study on GST Collection Budget 2018

The parliamentary session has begun and the all eyes are on the Budget 2018 that will be presented on 1st February, for the first time in the nation. The impact of GST rollout is expected to rock the budget session and will also have a greater impact on the budget itself according to a case study on GST collection. We all are knowing that GST was implemented in the July 2017 for the smooth trade and to increase the government revenue by monitoring the tax hoarders.

But, the lack of GST infrastructure and the problems related to it has hampered the whole structure. This improper implementation of GST has made a heavy toll on the government and for the last three months, there has been a growing fiscal deficit.

In all this hue and cries over Indian GST, here we are going to compare it with Malaysian GST. It must be noted that Malaysia is the last nation that has successfully implemented GST in its country.

Recommended: Benefits of GST on Small Businesses

GST tax collections in Malaysia

  1. Malaysia took 1.5 years for building all the desired technical infrastructure for GST.
  2. In Malaysia, after GST implementation, there was an overall increase of about 20 percent taxpayers.
  3. The country implemented undercover tax officers to monitor the regulation and made it almost impossible to do business without GST registration.
  4. In Malaysia, there are 97 percent SMEs but have gleefully accepted GST.
  5. After one year of implementation of GST in Malaysia, the overall tax collection rises to 19.4 percent from 12 percent.
  6. The improvement in the digital infrastructure and the removal of technical glitches are the key to make GST successful in India. In one year or so, if these problems are tackled, then GST collection can rise to manifold in India as well.

Things India Must Learn From Malaysia

  • In India, the overall GST compliance is only 64 Percent and the same is over 90 percent in Malaysia.
  • Malaysia has a better technical and digital infrastructure for the GST.
  • A large number of SMEs of Malaysia, specifically 97 percent has adopted GST, which is lacking in India.

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