GST-Goods and Services Tax Bill the Greatest Tax Reform in India?
On Thursday, India moved another step closer to implementing the biggest tax reforms it would see post-Independence. The much-awaited GST or Goods and Services Tax, is a flagship proposal made by the Prime Minister Narendra Modi government. Experts state that the GST, if implemented, will enhance one or two percentage points on the annual GDP growth, which will hugely impact investment strategies in a beneficial manner.
What is GST?
Currently, anything that is purchased − from a film ticket to a car − are subject to a multitude of taxes. These taxes vary from one state to another and at times, multiply too. The passing of the GST bill means that a confusing number of state and central levies will be replaced. This means that India will experience a common market for the very first time.
The proposal of GST is aimed at replacing the existing levies, i.e., luxury tax, excise duty, lottery tax, VAT, entertainment tax and central sales tax with a single tax. As a result, businesses can seek for a budget management plan with the implementation of GST.
PM Modi-led BJP took the initiative of forcing the bill through once overtaking power from the government led by Congress in 2014. However, in the recent times, a more conciliatory tone has devised broad correspondence between the two parties.
This has happened for the first time that all existing political parties have taken a unanimous decision of passing the GST bill. This act is not only mature but also depicts true achievement for the Modi-led government. The Goods and Services Tax is said to be the world’s most complicated tax reform. About 7.5 million businesses can register file returns and make payments on the GST portal.
Businesses can experience a humongous relief with the passing of GST Bill. Reason being there are various layers of taxes and exemptions, plus the tax compliance is extremely high in India. Therefore, the GST will be a much-needed reform. However, unless the bill is passed, no comments can be made on whether it will be a success or not. The GST council is to meet on March 31 to agree upon the GST rules. Stay tuned to Investment Summit India for updates on GST bill.
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