February 23, 2017 at 1:57 am

As the Indian Economy marches from strength to strength to a new level of development despite different problems and difficulties plaguing the economy and dragging the growth down and reducing the gains achieved. This is one of the measures which has been in cold storage since a number of years. It has come to the final stages of implementation. Some of the state governments have already accepted the proposal mooted by the central government in the meeting held on this issue, several others have to also endorse and pass the proposal in the respective state legislatures. While this process takes a final shape  let us try and understand what Goods & Services Tax means to the country and its people in the economic, social and administrative spheres.

Goods & Services Tax (GST) is a tax which aims at transforming Micro level benefits into Macro level economic growth for India. It aims at achieving a one nation tax market all over the country thus integrating the whole nation as one economic unit. This provides leverages which were hitherto unheard of and billions of rupees worth of trade can be transacted with the payment of only one time tax at one point thus avoiding the duplication of tax at multiple points and involvement of more number of tax inspectors who have to be dealt with by the people who are paying the tax. The amount of redtape and hiccups which one used to face also gets reduced and there is smooth flow of business and undisturbed seamless trade which this system facilitates.

The macro economic growth results in increased economic activity, gives a fillip to making India a manufacturing hub, leads to generation of more employment opportunities and finally leads to neutralization of taxes which will make our exports competitive. At the micro level the benefits to individual taxpayers can are as follows a single tax system which replaces the multiple levies and tax system all over the country. This results more movement of goods and services and trade between different states of the country. There is reduced human interface as a single point of tax eliminates checking and taxation of the same product at multiple points between different states and areas within each state and districts too. This will save tax payers lots of hassles and makes the process of doing business easier.

Earlier tax payers had to pay taxes to different regulators and government bodies which ends up inflating the prices of goods and commodities. This is eliminated and leads to reduced cost of compliance for taxpayers who are the building blocks of the economy at the micro level. One more good thing is that the cost of inventory and logistics is also greatly reduced leading to saving of costs for the government which they can pass on to the tax payers and ease their tax burden thus leading to reduction in price of goods and essential commodities.

The revised draft model of GST Law and draft law are now available in the public domain of the central tax agencies which all stakeholders can access and give their point of opinions and suggestion on improvement. If the Goods & Services Tax is implemented and becomes a law after the due process through which it has to go through, it will be a huge change in the economic scenario and there will be a chain effect right from the government, tax payers, the other stake holders in the economy ultimately trickling down till the common man of India whom it is aimed to ultimately  help.  

Hope the different groups involved in this process will use the system with the right intention leading to the benefits mentioned above and the desired results. This it now  being given final shape and made into a law. Hope by the coming of GST India becomes strong economically, financially, socially and politically  with one more step in the right direction in tax reforms which was long overdue.

• This topic was modified 7 years, 8 months ago by  Krishna Kumar.