Not long ago GST was implemented in India. GST (Goods & Service Tax) the biggest tax reform in India founded on notion of “one nation, one market, one tax”. The single biggest indirect tax regime has been kicked into force, dismantling all the inter-state barriers with respect to trade. The GST with single stroke has converted Indian market in one one unified market of 1.3 billion citizens. With total market worth of $2.4 trillion
Our government is trying to convert GST into “good and simple tax”. The idea is to implement GST across country to create one simple tax system in 29 states and 7 union-territories. Well manufactures and traders would benefit from fewer tax filings, transparent rules, and easy bookkeeping. And also consumers will be paying less money for goods and services, and government will be generating more revenue as revenue leaks will be blocked.
Well the impact may vary from long term impact to short impact. Looking at short term impact we the consumers will be paying more taxes than before. The majority of products which we use are having same takes or slightly higher rate of tax. But by looking at long term effect it is more than better way of paying taxes. GST has created transparent tax system. And also reduce number of indirect taxes. In long term it will benefit consumers as it tend to reduce prices which in turn will help companies as consumption will increase. It will also help to build a transparent and corruption free tax administration.
Not only that we actually need GST because we were paying taxes for taxes without even actually thinking anything about it.
Suppose Mr. A sells good to Mr.B and charges sales tax, then Mr.B re-sells those goods to Mr.C after charging sales tax. While Mr.B was coputing his sales tax liabilites, he also included the sales tax paid on previous purchases, which is how it becomes a tax on tax.
This was the case with the sales tax few years ago. At that time, VAT was introduced whereby every next stag person gets credit of tax paid at earlier stage. This means that Mr.B pays tax of Rs.11, he deducts Rs.10 paid earlier. Due to GST to huge extent, the problem of cascading effect of taxes is resolved by these measures.
The GST decision was passed unanimously. “All state governments and all political parties were party to GST reforms. Now they cannot alienate themselves from it,” jaitley told reporters. “I hope those who have distanced themselves will come on board,” the FM added. “We will move forward with these reforms. They should remember that governments of all the state and union territories were party to this decision.”
Congress stayed away from special meeting at midnight on June 30 convened by the government on GST implementation. The decision came after congress President Sonia Gandhi met former Prime Minister Manmohan Singh along with other leaders. Meanwhile, speaking to media, Venkaih Naidu said that the opposition has no issues and the decision is political one. “We do not know what is the reason … are they against GST? No. Have we brought GST unilaterally? No. Was GST BJP’s own decision? NO,” he said.
Instead of running from the decision such that of GST all the parties should have given their opinion and participated in decision making which in turn will make this nation economically strong. Many political parties and companies praise it. And some do not think it as promising as government says.
But whatever political parties think in long term the GST will defiantly be helpful. It will help government to create transparency and will also help government to collect more revenue. Which will help in terms this nation’s economy to boost.