Envisioner | August 2019 Envisioner August 2019 | Page 17

GST is a tax modeled on the concept of value addition where credit of taxes
already paid can be availed subsequently. Even before India, countries with
a small population like Australia and Canada implemented GST. It came into
effect in Australia as a value-added tax of 10% on most of the goods which
were opposed by small businessman stating that most of their income is
spent on paying the taxes. Once it came into effect a small country like Aus-
tralia suffered negative economic growth. Hence GST was termed as short-
term pain and a long-term gain. The one nation one tax regime brought many
challenges along with it. Hence the government had to ensure compliance
and manage the anger of the people trying to adjust to it.
Instead of having tax with a single rate, the government opted for having slabs
like 5%, 12%, 18%, 28% and 35% for a different type of products and services.
Some of the general items were listed in 0% slab. This helped India to adjust
to the realities of its economy. These slabs are being constantly updated as
the net tax collection increased with the aim to decrease the overall burden
for the consumers. The implementation of GST slowed down the economy of
the country to some extent but India still managed to be the fastest-growing
economy in the world.
GST being entirely based on e-compliance with four verticals e-tax, e-returns,
e-audit, e-assessment which has caused a major problem for small busi-
nesses in the Tier-2 and Tier-3 cities where still the billing system is not
computerised. Huge disparity between tax rates of the different components
of computers has made it infeasible for small traders.
Two years of survival of this economic and political storm has ensured that the
country will surely be benefited by it as it brings uniformity in taxes and im-
proved efficiency in logistics. This new chapter in Indian history has strongly
combined the forces of entrepreneurship with a high growth possibility.
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