game changer

Source: The Hitavada      Date: 03 Jul 2018 12:02:10

UNION Finance Minster Mr. Piyush Goel has rightly said that the roll-out of the Goods and Services Tax (GST) has proved to be the game-changer, a unifying factor as far as indirect tax regime of the country is concerned. Though still in the process of evolution, the one-country, one-tax system under the GST is showing positive impact as far as indirect tax mop-up all over the country is concerned, as also the widespread acceptance of the system by the business community after it was introduced a year ago. Though there were some hiccups at the initial stage of its introduction last year, gradually things appear to be falling in place as more and more business and corporate people register under GST norms. 

Prime Minister Mr. Narendra Modi has quite justifiably rejected the demand of Congress President Mr. Rahul Gandhi for a uniform tax rate of 18 pc to make the system simpler, saying that a Mercedes luxury car and milk cannot have the same tax rate. Thus he has made it very clear that those goods that are categorised as luxury items must necessarily invite higher tax incidence, while essential commodities like milk and other food items must remain in the range of 0 to 5 pc range of taxation with a view to unburden the common man, especially when it comes to meeting his essential daily needs.The objectives behind introducing the single indirect tax regime throughout the country were to simplify the taxation system, bring transparency in business reporting, end the menace of inspector raj, the business community so much despised, put a check on corruption, control generation of black money, besides many more advantages that may accrue over a period of time as the whole country gets accustomed to the GST regime.

In a way, in a single stroke several objectives are being sought to be achieved and give a fillip to economic activity by removing the stumbling blocks that operated in the form of inspector raj. That as many as 17 state and Central taxes and 23 cesses were abolished in one go also shows the enormity of the inspector raj that was a sure recipe for corruption and also invitation to hiding of incomes and generation of black money.The Prime Minister has said that the system is evolving and is being calibrated, taking the views of all stakeholders, state governments and business and corporate communities, thereby removing the rigidity of the past taxation system. The stress is on to make the tax payment system as simple as possible. That should be a welcome development for the business community at large. The use of digital technology for compliance of the GST regime would go a long way in simplifying processes and removing or lessening the presence of the inspector.

The benefit is mutual: while the business man will see the less of the inspector, the Government will expect its revenue to go up. Already within one year’s time, month after month there has been an incremental mop-up of tax revenue under GST. With the growing number of businesses registering under the GST the tax revenue is bound to see much buoyancy. The transporters’ community must also be a happy lot now that the obstacles in the form of octroi posts have been abolished all through the country, ensuring smooth flow of goods from one place to another and one state to another. Faster flow of goods is bound to raise the productivity all around. This is one more area of corruption that has been demolished, providing great relief to the transport sector and banishment of one more avenue of corruption and generation of black money.

The Prime Minister has described GST as the greatest unifying factor for the country and indeed it is going to change the way inter-state economic activity shapes in the coming days.