Lesser tax rates: GST law has only 4 rates (apart from zero rating and exemption) compared to previous regimes where Excise, VAT, Entry Tax, Octroi etc. had multiple rates. Each levy having at least 5 rates made things very complex. To that extent GST rates are far smaller, simpler and easy to determine and apply.

One rate across the country: Under the earlier regime, VAT and Entry Tax/Octroi rates differed in different states, causing inequality and confusion, and hampered the industry. GST law has put this anomaly to rest.

Substantial reduction in tax: With 12.5% Excise duty, 14.5 to 15% VAT apart from non-creditable tax such as Octroi, CST etc., many goods had tax rates under the earlier law - even more than the highest GST rate of 28%. There now is a significant reduction, particularly after the midway reduction of rates following the GST Council meeting in January.

One law/same rules, procedures: Under the earlier regime, each state had its own VAT law/Octroi/Entry Tax law which differed widely from state to state, making it a complex scheme of indirect tax levy, collection and administration. Now, every state GST (SGST) law is similar to one another, making compliance much easier for the industry.

Less intervention of GST officials: As compliance is technology-driven, it has brought about a situation where the GST department officials’ interventions have considerably reduced – except for reddressing the initial glitches/documentation/queries. Online filing of refund claims and online processing, too, have eliminated the need to meet government officials.

More assesses/transparency and disclosures: Accounting all outward and inward supply details and filing returns electronically has resulted increase in number of assesses and transactions compared to the previous indirect tax regime. This has brought buoyancy in tax collections and has given government the much-needed flexibility to tinker with the rates. Income Tax collections, too, have swelled.

High rate of taxes on services: From being levied a Service Tax of 15% earlier, multiple rates ranging from 5% to 28% have been introduced in the GST regime, resulting in steep increase. The standard rate for many of the services is 18% now.

Complicated E-way Bill system has replaced check post: The cumbersome inter-state check posts were replaced by complicated E-Way Bill mechanism that has put the industry on tenterhooks besides increasing the compliance cost.

Government response to queries: Some of the answers provided by the GST helpdesk and other mechanisms were incorrect, and not all responses were prompt, which resulted in bottlenecks in GST filing.

Advance Ruling: The Advance Ruling Mechanism is a good measure to reduce tax litigations in future. But with Assistant and Deputy Commissioners providing rulings, there is a revenue bias, and most rulings are in favour of the government. Also, ruling given in one state is not binding on the assesses for his own business in any other state.

Refund claims having inverted duty structure: Tax paid on input supplies (inward supplies) has accumulated, and the efforts to settle those claims are inadequate. This has impacted exporters significantly, who are finding their working capital blocked.

GSTIN Infrastructure: Businesses faced hardships because of GSTIN Network’s failure to handle huge volumes of data. Because of frequent failure and technical glitches, they were unable to file returns, get credits and claim refunds on time, forcing the government to frequently change due dates.

MSME, the most affected: Many medium and small-scale industries that were not technologically upgraded to meet the compliance requirements under GST, where tax administration and collection is technology driven, has been impacted. Further, smaller firms that are not required to register themselves due to threshold limit are not welcome by big businesses, forcing them to either get themselves registered or lose business.

Petrol and diesel are kept outside GST ambit, paving the way for cascade effect of taxes on their prices.