The historic passage of GST bill in Parliament has technically removed the multiplicity of taxes. The creation and execution of the tax regime will be the key in bringing the real change
One huge nation comprising of 29 states with just one tax rate is not a mere romantic idea but also a very practical and attainable. The enactment of GST across the nation is a milestone in the history of India. It has almost equal significance with the adoption of the Constitution of India by the Constituent Assembly way back in 1947. The Union Government headed by Prime Minister Modi deserves a thousand plaudits for orchestrating the historic landmark epaulette to India’s Constitution with an amazing finesse.
In one stroke, several financial ills afflicting the nation since 1947 viz. taxes on taxes, variations in taxes from state to state, duplication/triplication of taxes have gone into history. Not only that, massive corruption, discretionary powers of interpretation of laws, the agony of voluminous paper-work, bureaucratic harassment in the name of annual assessment etc. too, are now poised to become relics of the Command-Control economy imposed upon the country by the first Prime Minister. States shall no more enjoy unmitigated liberty to impose taxes here and there at their whims and fancies in the name of State autonomy or federalism as they would be governed by one Parliamentary Act alone. Another salient feature of the law is the constitution of GST Council comprising of members drawn from States and Centre. The Council would act as a tribunal thrashing out most of the contentious issues at the Council level itself. That significantly reduces the burden of litigation involving tax disputes on an already overburdened Judiciary.
The Act transforms the entire nation into one market wherein goods can be dispatched from anywhere to anywhere, billed and sold anywhere at a uniform price without being tormented by additional tax worries. It shall generate more jobs with the rise in productivity as well as facilitate raising more warehouses across the country reducing wastages. It goes a long way in boosting consumption, nurturing entrepreneurial enterprises, rising in services to raise a vast chunk of the population above the poverty line. For employment generation, productivity must improve and GST is a powerful tool to boost productivity. GST is a potent boon for those first generation entrepreneurs who possess a high level of morale with grit and determination to succeed as their only seed capital. The nationally unifying taxation law is a great socio-economic equaliser and a true measure to democratise wealth substituting ‘trickle down effect’ or ‘Rob Peter to Pay Paul’ of the much maligned Nehruvian era with so-called ‘Hindu Rate of Growth’, now poised to be substituted by ‘NaMo Rate of Growth’.
As the GST law is destined to be administered through a digital GST Network alone, Govt. shall be in the know of each and every financial transaction occurring in the country. The payment system shall root out indirect tax evasion, generate enormous data for analysis and formulate better economic plans.
| “GST will make India one
economic market with uniform taxation”
-Arun Jaitley, Finance Minister
“After GST bill, tax evasion and corruption will reduce”
-Sharad Yadav, JD (U) Leader
“Implementation of GST will be a big incentive for bringing new investments into India and eventually will foster the growth of the Indian economy. FICCI would be privileged to work with and support the Central and State Governments in enabling a timely and hassle-free roll out of GST in India”
-Harshavardhan Neotia, President, FICCI
“It is beneficial for Kerala and that is why the LDF Government is supporting GST”
-Dr TM Thomas Isaac, Economist,
Finance Minister of LDF Ministry in Kerala
“Are we going to reduce the states to come to Centre with begging bowls to ask for money”
-Sitaram Yechury, CPM General Secretary
As every historic move spontaneously creates a few ‘Prophets of Doom’, GST too, is no exception. There are experts critical of the two-tier structure of GST who have overlooked the fact, narrowing down from some 64 types of taxes amounting up to 35 per cent on invoice value in the country to a mere two up to 18 per cent, itself is an enormous achievement. With greater efficiency, benefits and economic integration among States, it may well pave the way to just one GST in future as they have been emphasising so far. Opposition repeatedly stressed upon one GST in several countries which even they have not been able to achieve in mere one stroke. With precious experience gained when the current Constitution’s 122nd Amendment Bill pertaining to GST is enforced and critiques turning vociferous supporters and facilitators, the situation may very well evolve to readily assimilate One Tier, One GST in the country in years to come.
It is a highly commendable transformative achievement registered by Modi Government.