One nation, One Tax

GST is a welcome change for the economy and it will change the whole scenario of current indirect tax system. The introduction of Goods and Services Tax (GST) is one of the biggest tax reforms for India. GST is quite different from the existing indirect taxation system in the country.  It is considered as biggest tax reform since 1947. GST was first introduced by France in 1954 and now it is followed by 140 countries. As GST will now bring a uniform tax structure subsuming a number of imposts and  it will help add around 2% to the country’s GDP which reveals the fact that that GST is a game-changing indirect tax reform and its implementation will give positive result in long term growth of our country. GST is not just a tax change but it will benefit the economy as a whole and have far-reaching impact on businesses. Due to the implementation of GST the businesses will grow and will become clean and superior.

GST is the most significant tax reform since Independence for what is now Asia's third largest economy. It is also a potential game-changer as the burden of taxation moves from the state of manufacture to the state of consumption of goods and services. On GST, our PM has rightly said that this is becoming a reality after years of effort, ahead of the roll out of the landmark tax reform measure from July 1. 

GST is a comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at the national level and it will replace all indirect taxes levied on goods and services by the Indian Central and State governments. Today consumers have no idea about the extent of taxes they pay on goods. If we get a bill after buying merchandise which gives the extent of VAT we have paid, it is an understatement of the actual tax we have paid. Therefore, today it is reasonable to assume we pay well over 20% tax for most merchandise we buy. VAT was the highest contributor in tax revenue of state governments. But after the implementation of GST this will now subsumed along with surcharge and cess into GST. As the  barriers between states are removed, we as consumers will not end up paying “tax on tax” which is what happens when goods move across state borders. It will now unify all the indirect taxes under an umbrella and will create a smooth national market.

Our PM Modi has rightly said that “GST's implementation is a "complex" task and suggested that it could be the subject of future case-studies.” Due to dissilient environment of Indian economy, it was the demand of time to implement GST. Goods and Services Tax (GST) is an indirect tax reform which will now remove tax barriers between states and create a single market. Government deserves praise for launching massive media campaign to create awareness, with telephone help lines opened to address public concerns. Consumption and productions of goods and services is undoubtedly increasing and because of multiplicity of taxes in current tax regime administration complexities and compliance cost is also accelerating. No doubt, success of such a major change always depends on its effective implementation and there will be challenges in way of GST implementation.