If we consider the people views, GST is considered as not a ‘Make in India’ friendly. For the imported materials, the IGST rates are significantly not higher than the essential manufacturing inputs. This comes out as the major deviation in the system and required to be corrected as soon as possible to follow a unified tax regime.
No doubt, being a unified tax regime, GST has been an excellent mechanism for offering rationalizes and phase out non-essential imports. This can only happen if the government is fully focused in improving the manufacturing sector.
Make in India is a dream policy proposed by the Prime Minister of India that would facilitate us to become the manufacturing hub of the world. The proposal is an initiative of attracting the foreign investment and if implemented well increases the job opportunity for the youth in the manufacturing sectors. GST is considered as a destination that is based on the indirect tax and counts the indirect taxes. Therefore, the whole process is clear, without any swindle. The previous tax regime was the biggest hindrance in between the development of the country and causes the burden on the normal people. Without any doubt, GST is minimizing the manufacturing cost in terms of the tax. It all shows that the GST brings a major boost to the ‘Make in India’ project and makes the India competitive in terms of manufacturing.
It not only reduces the tax burden, but also fosters the growth of the production sector. The new tax regime welcomes the transparency in the system and adds up in the revenues of the government. But, despite of all the advantages there are some negative things also related to the GST.
Where is the loophole?
Taking an example of China, they are continuously bringing a twist in their import policy and make the others to believe in them that the trading is transparent. If we compare India and China, a large trade gap can easily be seen. Take a look at the last five years India’s export to China, the business has been shrunk to $9.05 billion. This number is despite of the fact that the value of rupee has been decreased by 30% since that time.
Previously, the India expert the traditional handloom dresses and beadwork to the china. But, according to the current scenario, it is really difficult to trade there as China itself started the manufacturing of these items. This makes the trading process even harder. Our ruling government is not able to analysis that like ethnic dresses there are many products that are exported by the China throughout the globe. GST is not a new thing; it is already implemented in 150 countries and providing the viable solutions. It allows a free trade among different states while evading extra taxes.
By looking all the facts, the Indian banks should also work in harmony to make the ‘Make in India’ project a huge success. Apart from all, the GST implementation is the right step towards the development.