The government has come up with many changes regarding the creation of a compliance-driven procedure via the interaction of GST returns, e-invoicing system, and e-way bills, along with audit reports’ self-certification. Due to the pandemic, tax structure has become an even more crucial part of the economic-revival plan of the nation. India is waiting for signs of positive development after such an eventful year. GST, owing to multiple ambiguous provisions and lags, has now started to take baby steps towards solidifying its questionable position. The year 2022 will likely be a reorganization of the rate slabs and GST provisions by focusing on achieving its tax targets and keeping an eye on the industry demands.  

This Tax Administration Will Be Tech-Driven

With a paradigm shift into a digital financial tax regime, digitization will prove to be the upcoming mantra for 2022. This shift, in turn, will cause an immense impact on the way the nation will levy tax on the offshore digital economy companies that have their customer base here; this has become a chief concern for the overseas entities as well.  

Tax Rate Rationalization

From GST’s inception, this topic has been discussed quite often. For the policymakers, rationalizing the GST slab structure of the slab rate and furthering the indirect tax system’s efficacy in India will be the focus areas. By withdrawing chief exemptions, it’s expected that the present four-rated slab structure will be condensed to a three-rated slab structure. Apart from improved GST collection, the modification above will also guide rectifying the inverted duty structure on various goods. The inflationary trends will make the government differ in GST rates increasing on certain goods as part of rationalization.  

Customs Duty to Assist Aatma Nirbharta

Aiming to boost indigenous production, it’s expected that the government will keep on lowering customs duty on parts, components, and raw materials to be put into use by Indian manufacturers. At the same time, an increase in responsibilities of importing finished goods to assist the Make in India proposal can also be expected. Reduced Compliance Burden The SMEs and MSMEs have been demanding enhancement in compliance burden from all the aspects along with minimal statutory compliance. It’s announced that taxpayers who have an annual cumulative turnover of up to ₹ five crores need not file for reconciliation statements for the FY 2020–2021 onwards in Form GSTR-9C. Taxpayers with aggregate turnover of up to ₹ two crores need not file the annual returns for the FY 2020–2021 in Form GSTR-9. Still, in contrast, the increased limitation for availing ITC with the introduction of the condition that states that a 100 percent matching of GSTR-1 and GSTR-2A/2B of the supplier and the recipient, respectively, will add on the compliance burden for the taxpayers. It is visible that the GST landscape has advanced through its policy and law modifications and automation of compliance, among others.  

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