Goods & Service Tax : The Biggest Economic Reform After 1991

Goods & Service Tax : The Biggest Economic Reform After 1991

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One india,one tax.

 

It was indeed an historic day for the whole of India and this day is going be forever remembered in India’s economic history along with being the most consequential economic reform since liberalization.Yesterday,the GST bill was passed,10 years after the idea was mooted. The bill has not just been passed but it has been passed unanimously with only one party,AIADMK walking out of the Rajya Sabha and not voting in favour of the bill.This made it very clear that a large consensus had been witnessed. Finance Minister,Arun Jaitley said that ‘it is a great day for Indian democracy as well as Indian federalism’ ,this victory was also celebrated by cutting a cake in the Rajya Sabha with a joyous and vibrant environment all around. A big relief has come our way after much wait,now more taxes will be avoided,goods will freely move and the cascading effect of taxation will be evaded with the implementation of this bill.

An economy which has seen many dark clouds is finally going to get some sunshine. We will be benefitted in the following ways-GST aims to unite the country into a common market by removing all barriers across states.It improves ease of doing business, eliminate tax cascading.There will be a 12-14% drop in costs of capital goods,along with lower inventory costs due to which manufactured goods will become cheaper.The GST bill also replaces 17 indirect tax levies.If implemented successfully,it is expected to add upto 2% to the country’s gross domestic product. cars,paint and cement,two wheelers,movie tickets etc .. become cheaper whereas cigarettes become costlier,banking services expensive.

For business and industry-there is easy compliance,uniformity of tax rates and structures,improved competitiveness,gain to manufacturers and controllers.For the governments – high revenue efficiency,simple and easy to administer,better controls on leakages.And for the consumers – single and transparent tax proportionate to the value of the goods and relief in overall tax burden.

It’s a win-win situation for everyone.

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Image Source-Mint

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