EDITOR’S DESK
WILL GST LAW BE A GAME CHANGER?
The GST law has been finally brought to reality
by passing four bills in the parliament (Lok
Sabha) on March 29, 2017. These bills are –
(1) The Central Goods and Services Tax Bill,
2017
(2) The Integrated Goods and Services Tax Bill,
2017
(3) The Goods and Services Tax Compensation
to States Bill, 2017 and
(4) The Union Territory Goods and Services Tax
Bill, 2017.
These four Land mark bills have ushered in the
biggest taxat ion reform in the Post-
Independence era in the form of GST. It is
expected that the government will implement
the new GST law from July 1, 2017 whereby it
will subsume various indirect levies of the
Centre and states and create input tax credit
chain for refunds. It will also make way for an
anti-profiteering authority. The F.M. Arun
Jaitley has allayed apprehensions about rise in
prices of goods and commodities after the roll-
out of GST as the tax rates will be kept at near
current levels.
ROLE OF GST COUNCIL
A GST Council is to be set up under the GST Law
to decide everything relating to the tax structure
with consensus and based on the principle of
shared sovereignty of both the centre and the
state governments.
The GST Council will be India's first federal
institution to oversee sovereignty of the centre
and states in relation to indirect taxes. It is a
federal contract with constitutional sanction to
2
maintain a balance between the centre and the
states regarding indirect taxes. It enjoins a pius
duty on all of us to see that this federal
institution works well.
The council will fit individual goods to specific
rate and an attempt will be made to put goods in
slab closest to current rates so that prices do not
increase. The various state assemblies (31 in
number) will need to pass state GST laws. Ten
groups have been set up to look into various
concerns on tax matters. The government is to
launch a massive outreach program to raise
awareness among traders, manufacturers and
the public. It will make training arrangements to
train all the stake holders.
ANTI-PROFITEERING BODY
The GST Bill has a provision of setting up an
authority to oversee whether manufacturers and
service providers actually pass on the benefit of
lower tax burden under GST to consumers.
Experts say that this measure is ill-conceived
and not needed at all. GST will ensure
competition in the market place to set fair
prices, allow ease of entry and exit for all
industries.
GST subsumes many levies and cuts out
cascading effect of multiple taxes that products
and services bear lowering thereby costs and
creating efficiency gains. Retail prices will come
down, automatically, for products that have
been bearing indirect taxes. Already an authority
like Competition Commission of India (CCI) is
there to check if there is any collusion for abuse
of market dominance to prevent fair
competition.
Cont. Page No. 20
Economic Challenger// ISSN 0975-1351/ April.-June, 2017