GST bill passed: India looks set for its biggest ever tax reform

The passage of the GST bill in Rajya Sabha takes the country a step closer to being a large, uniform market

GN Bureau | August 3, 2016


#indirect taxes   #Rajya Sabha   #parliament   #GST  


The Rajya Sabha on Thursday passed The Constitution (122nd Amendment) Bill, 2014 (GST), ending years of political wrangling and raucousness. 

GST is essentially a comprehensive indirect tax on manufacture, sale and consumption of goods and services across the country and it replace taxes levied by the central and state governments. 

The Congress, which had initially pushed for GST, had later opposed the bill. But the party finally came around and helped ensure that the bill gets passed in the upper house. A day earlier, Congress vice president Rahul Gandhi had met Leader of the party in Lok Sabha Mallikarjun Kharge, former finance minister P Chidambaram and Deputy Leader of the party in Rajya Sabha Anand Sharma  in Parliament House and held deliberations regarding the tax reform legislation. 

Yet the road ahead is still a long one as all the states too have to now pass their own laws on it. Once that happens, it will be an important tax reform that hopes to make India’s 1.2 billion people strong market an easier place to do business in.

The GST bill had a difficult journey. The budget of 2006-07 had announced GST by April 1, 2010. An empowered committee of state finance ministers, headed by the then West Bengal finance minister Asim Dasgupta, had submitted report to the central government in April 2008. Since then it has been a legislative challenge. 

Read more about the GST bill   

The introduction of a single indirect tax regime across the country will be a significant development. South Asia is expected to be the fastest growing sub-region, led by India, whose economy has shrugged off global headwinds and is on track to meet ADB’s March fiscal year 2016 projected growth target of 7.4 percent, the Asian Development Bank has said in a supplement to its Asian Development Outlook 2016 (ADO 2016) report.

An explainer on GST 

According to ey.com, GST will be a game changing reform for Indian economy by developing a common Indian market and reducing the cascading effect of tax on the cost of goods and services. It will impact the Tax Structure, Tax Incidence, Tax Computation, Tax Payment, Compliance, Credit Utilization and Reporting leading to a complete overhaul of the current indirect tax system. 

GST will have a far reaching impact on almost all the aspects of the business operations in the country, for instance, pricing of products and services; supply chain optimization; IT, accounting and tax compliance systems, it said.

Model GST law

 

 

Comments

 

Other News

Why Gorkhaland is an idea whose time has come

Darjeeling and the neighbouring areas are burning once again after the fire of the demand for Gorkhaland state was ignited by the West Bengal government’s provocative action in trying to impose Bengali language on the Gorkhali speaking majority in the hill districts in the north of the state. Three p

India stares down the dragon

India is increasingly turning to defence diplomacy to gain strategic depth in its neighbourhood and beyond, a move that is expected to checkmate China’s muscular domination. Defence as a tool of diplomacy is helping India to win over friendly countries who are currently witnessing a lot of

Recalling a time when BJP opposed GST

The Bharatiya Janata Party is today going to town over the Goods and Services Tax (GST). But, there was a time in the recent past when the party opposed it tooth and nail, with the Gujarat government, then led by Narendra Modi, describing it as “retrograde in nature and completely against the tenet

No water in a reservoir that supplies Chennai

 There is not even a drop of water in Cholavaram reservoir, says an officer from Chennai metropolitan water supply and sewerage board. The Cholavaram reservoir, one of the main water sources to Chennai, currently has zero million cubic feet (mcft) of water, according to data provided by Chen

Should Air India be sold off?

Should Air India be sold off?

Ransomware 2.0 hits India, Europe

Barely a month after the global Wannacry cyber hack, a new variant of ransomware malware has locked systems across several European countries and India. Petya, as cyber researchers call it, uses vulnerability in the Microsoft’s Windows system, and encrypts the computer files. It is understo





Video

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter