HomeGST NewsGST Is The Talisman To Build The Single, Strong And Fast Economy

GST Is The Talisman To Build The Single, Strong And Fast Economy

Goods and services tax has replaced all indirect taxes levied on goods and services by both the central and the state governments in India. It is designed to consolidate the economy and put it on the fast track of development by eradicating the unnecessary confusion over the taxation. This tax system is the noteworthy breakthrough and paving the way for an all-inclusive indirect tax reform in India.

The integrated Indian market is beneficial both for big and small manufacturers and traders –

Introduction of a GST was the need of the hour and the BJP government took this drastic action. It became essential in the emerging environment of the Indian economy to introduce the single unified taxing system.

Some of the benefits of GST are as follows –

  • The production and distribution of goods, services are increasingly used or consumed and vice versa and there was room for the confusion and malpractice without the single taxation system. The previous taxation system in which there were separate taxes for goods and services, required division of transaction values into value of goods and services for taxation, and this was the reason of the greater complications, administration, including compliance costs.
  • The GST system solved this problem, when all the taxes are incorporated into the single tax, it became possible by the GST to make possible the taxation burden to be split equitably between manufacturing and services and avoid the complications
  • The GST is levied at the final destination of consumption; it is not levied at various points comprising manufacturing to retail outlets. This is the great master step to form the single, powerful and common national market by removing economic distortions and bring about development.
  • Corruption has always been the hot topic in Indian context and GST is designed to fight corruption by building a transparent and corruption-free tax system.

It is true that the Government has many expectations from the GST Bill. We cannot deny certain challenges which need to be taken care if the government wants this taxation system works well.

Some point should be noted here.

  • It is the administrative question to know whether the Government machinery is efficient enough for such a titanic change in the Indian economy.
  • Do the taxpayers feel like the extra burden on their shoulders?
  • Is it going to increase the Government’s revenue in the long run?
  • What are the impact on the manufacturers, traders and ultimate consumers by GST?
  • Is GST going to help the small entrepreneurs and small traders of India?

Evaluation of tax is essential –

In the recent election campaign in Gujarat Rahul Gandhi described GST as “Gabbar Sing tax”. My point is that government needs to review the administration of this drastic step. There is no doubt that it is in favor of the economy, but evaluation is essential.

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