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Will GST be game-changer?

Will GST be game-changer?

It is widely believed that at the midnight of June 30, 2017, the country will face another tryst with destiny. This time it is the far-reaching Goods and Services Tax (GST) which has taken no less than 16 years in the making. It is expected to usher in a new era in public finance while addressing the complex indirect taxations system, where various taxes levied by the Centre and the states lead to double taxation and the very avoidable cascading effect. The decision has been made unanimously as the Union Finance Minister Arun Jaitley emphasised time and again, hoping the GST will be adopted countrywide on July 1, without further glitches despite being imperfect. It is a far-reaching measure, evolved and implemented first by France. Economists firmly believe that the GST is an effective form of taxation where there will be no incentive to evade taxes.

At the same time, states not implementing the GST will remain at a disadvantage. The sensitive border states of Jammu and Kashmir, as well as West Bengal, continue to have strong reservations about the GST. Be that as it may, Jaitley has impressed upon them the futility of not implementing the GST. Even US President Donald Trump specifically praised Modi for implementing far-reaching reforms like the GST. Having a single uniform tax system is expected to help integrate India into a single national market having benefits for both producers and consumers alike. The GST is being viewed as a rare and bipartisan decision where the spadework was done by the previous Congress-led United Progressive Alliance government.

The final implementation is being undertaken by the BJP-led National Democratic Alliance. The road ahead is not without its attendant problems. One of the issues discussed in some detail was whether the GST will erode the fiscal autonomy enjoyed by the states. There is no doubt that the states will have to give up much of their power to tax, according to their own interests and objectives. The other issue was one of inter-state equity. On its part, the Centre has promised to at least make up the loss in the initial years, so that the states do not suffer. Then there could be snags in getting each enterprise GST ready in terms of accounting and invoicing, for taxes and rebates. This is a tricky thing, especially in the transition phase. In the long term, GST will contribute to the making of a modern taxation system, where it will not be easy to dodge taxes and conceal incomes. West Bengal Chief Minister Mamata Banerjee's decision to boycott the special midnight session of Parliament to roll out the GST is in keeping with its non-cooperative attitude towards the Narendra Modi government. The Congress, as well as other opposition

Economists firmly believe that the GST is an effective form of taxation where there will be no incentive to evade taxes. At the same time, states not implementing the GST will remain at a disadvantage. The sensitive border states of Jammu and Kashmir, as well as West Bengal, continue to have strong reservations about the GST. Be that as it may, Jaitley has impressed upon them the futility of not implementing the GST. Even US President Donald Trump specifically praised Modi for implementing far-reaching reforms like the GST. Having a single uniform tax system is expected to help integrate India into a single national market having benefits for both producers and consumers alike.

The GST is being viewed as a rare and bipartisan decision where the spadework was done by the previous Congress-led United Progressive Alliance government. The final implementation is being undertaken by the BJP-led National Democratic Alliance. The road ahead is not without its attendant problems. One of the issues discussed in some detail was whether the GST will erode the fiscal autonomy enjoyed by the states. There is no doubt that the states will have to give up much of their power to tax, according to their own interests and objectives. The other issue was one of inter-state equity. On its part, the Centre has promised to at least make up the loss in the initial years, so that the states do not suffer. Then there could be snags in getting each enterprise GST ready in terms of accounting and invoicing, for taxes and rebates. This is a tricky thing, especially in the transition phase. In the long term, GST will contribute to the making of a modern taxation system, where it will not be easy to dodge taxes and conceal incomes. West Bengal Chief Minister Mamata Banerjee's decision to boycott the special midnight session of Parliament to roll out the GST is in keeping with its non-cooperative attitude towards the Narendra Modi government. The Congress, as well as other opposition

The GST is being viewed as a rare and bipartisan decision where the spadework was done by the previous Congress-led United Progressive Alliance government. The final implementation is being undertaken by the BJP-led National Democratic Alliance. The road ahead is not without its attendant problems. One of the issues discussed in some detail was whether the GST will erode the fiscal autonomy enjoyed by the states. There is no doubt that the states will have to give up much of their power to tax, according to their own interests and objectives. The other issue was one of inter-state equity. On its part, the Centre has promised to at least make up the loss in the initial years, so that the states do not suffer. Then there could be snags in getting each enterprise GST ready in terms of accounting and invoicing, for taxes and rebates. This is a tricky thing, especially in the transition phase. In the long term, GST will contribute to the making of a modern taxation system, where it will not be easy to dodge taxes and conceal incomes. West Bengal Chief Minister Mamata Banerjee's decision to boycott the special midnight session of Parliament to roll out the GST is in keeping with its non-cooperative attitude towards the Narendra Modi government. The Congress, as well as other opposition parties, have boycotted the special session. This might anger people further as they are already fed up with the opposition's obstructionist tactics.

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