ONE YEAR OF GOODS AND SERVICE TAX : POSITIVE AND UNDENIABLE OUTCOMES AMIDST IMPLEMENTATION HICCUPS
ONE YEAR OF GOODS AND SERVICE TAX : POSITIVE AND UNDENIABLE OUTCOMES AMIDST IMPLEMENTATION HICCUPS
Authored & Compiled By MITHILESH KUMAR SINHA | Professor of Economics , Nagaland University , Lumami - 798627 , E-mail : mithileshkumarsinha5 @ gmail . com , Cell : + 919436006425
PROLOGUE
outed as the most significant economic reform since independence , the Goods Tand Services Tax ( GST ) completed one year of its implementation on July 1 , 2018 . In a major initiative to ease the tax system of the country , the government launched GST on July 1 , 2017 . Under the GST regime , a regulated tax system was introduced in the country . With the introduction of this ' one nation one tax ' regime , the country ' s business landscape saw a widespread makeover . The roll-out of GST was accompanied by frequent changes in rules , which was welcomed by a few and deemed complex by others . The launch of GST stirred a lot of hubbub in the corporate sector .
THE MOTIVATION FOR GETTING IN THE GST
The first is that this is the ideal system where there is a single tax rate across the country which makes it easy for everyone to understand . The plethora of state taxes and central duties had made things difficult for players , and there were avenues for dodging the system as well as accepting bribes which go with such imperfect structures . Second , by having a GST , it was to make doing business easier with transparent rules . Third , the GST was to bring on board the unorganized sector which hitherto was out for historical reasons . Fourth , GST was to be revenue neutral at the end of the day while prices too would on the whole even off , and the system would be inflation neutral . Fifth , compliance was to become more comfortable as one did not have to face human beings and could do all the work online .
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HOW HAS GST PROVED TO BE BENEFICIAL IN ITS FIRST YEAR ?
According to a PIB ( Press Information Bureau , government of India ) release of March 23 , 2018 , the average growth rate of the Index of Industrial Production ( IIP ), considered as an indicator for industrial activity , was 5 pc between July 2017 and January 2018 in comparison to 3.9 pc in the year-ago period . Post-GST industrial activity has accelerated . The GST rate was reduced from 28 pc to 18 pc and 5 pc for a lot of consumer goods . The applicability of various provisions ( like TCS / TDS , opposite charge , and form of tax returns ) was deferred for a smooth transition . “ With the rollout of GST , India witnessed a plethora of changes in the economic atmosphere of the country . The resulting changes were joyous for the most of sectors of the economy barring a few exceptions . The GST led to a single national market with the removal of various taxes and state barriers resulting in the fall in logistics cost and ultimately the prices of goods . With the introduction of a single tax structure under GST , the government has been able to increase revenue collections due to the
Economic Challenger // ISSN 0975-1351 / Issue 81 , October-December 2018 One Year of Goods And Service Tax
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