Warning: Trying to access array offset on value of type null in /home/indiacommentary/public_html/header.php on line 181
oppn parties One Year Of GST: Critics Must Eat Their Words

News Snippets

  • Karnataka HC has ruled that a harassment complaint lodged by a wife after receiving a divorce notice from the husband loses its weight in the eye of the law and quashed the FIR filed by a women against her husband and in-laws
  • 35 people killed in renewed violence in Manipur, 30 of them militants
  • Manipur boils on the eve of Home minister Amit Shah's visit as militants strike, vandalize MLAs home and loot armouries
  • Kerala chief minister P Vijayan says Centre's decision to cut the borrowing limit of the state is 'sadistic' and shows its negative mentality towards the state's development
  • Rahul Gandhi recieves passport, set to travel to the US
  • Centre said that the march-to-Parliament by wrestlers was a 'deliberate provocation'
  • Prime Minister Modi inaugurates the new Parliament building, calls it 'cradle of empowerment'
  • Mamata Banerjee will most likely attend the opposition meet called by Nitish Kumar in Patna
  • With container prices, which were on fire, crashing by 40% YoY, importers and exporters in India heaved a sigh of relief as the burden of high freight costs will reduce
  • In an aim to push lenders to manage risks better after the US financial crisis, the RBI has reviewed bond value norms
  • 14 countries under the Indo-Pacific Economic Framework (IPEF), including India, entered into an agreement to boost supply chains and counter China
  • Malaysia Cup badminton- H S Prannoy wins the title beating Weng Hong Yang of China 21-19,13-21, 21-18
  • Yashasvi Jaiswal replaces Ruturaj gaikwad as stand-by opener for the WTC final
  • IPL final washed out due to rain, rescheduled for today, the reserve day
  • In a shameful incident, Delhi Police manhandled international wrestlers when they sought to march peacefully to the new Parliament building to highlight their greivances, detained some top wrestlers
Fifth IPL title for Chennai as Ravindra Jadeja hits 10 off last two balls to spoil the party for Gujarat Titans

Warning: Trying to access array offset on value of type null in /home/indiacommentary/public_html/article.php on line 19
oppn parties
One Year Of GST: Critics Must Eat Their Words

By Sunil Garodia
First publised on 2018-07-04 08:24:34

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator.
It is one year since the landmark reform GST was introduced in India to subsume 17 taxes and 23 cesses. It was called the “good and simple tax” by PM Modi and was expected to bring a plethora of benefits to the economy and the countrymen. Although it was introduced hastily without the groundwork required to launch such a huge reform having been completed, it needs to be stressed that no tax structure can be fine tuned to be absolutely glitch-free before its launch. It is only after some months – or even years – of being in place that tax systems can be made stable. If we keep that in mind, GST is a huge success.

It also needs to be kept in mind that since most state levies were being subsumed in GST, revenue loss after its implementation would have meant that the states would have suffered and would have called for going back to the old system. Hence, the initial rates were kept high to make them revenue-neutral. Now that compliance has improved (and will improve further as simplification of the filing and reporting process goes on) and collections have surpassed expectations, we can expect rates to be lowered. Despite the prime minister saying that “milk and Mercedes cannot be taxed at the same rate,” we can also expect rationalization of the tax slabs. At present, there are six slabs of 0%, 5%, 12%, 18%, 28% and 28% plus cess. In future, we can hope for just four slabs.

Since the states have gained from the implementation of GST, it should now be impressed upon them that it is necessary to bring petroleum, alcohol, real estate and electricity duty under the net. The Centre should also think of doing away with exemptions and bring all goods and services under GST. Keeping products and services away from any tax system or granting exemptions to some, leaves room for tax avoidance. Since invoice matching is going to be introduced from September 2018, ideally all goods and services must be brought under the net.

It is heartening that the e-way bill system has been implemented without glitches. It will go a long way in reducing corruption at state border and ensure faster movement of goods. Now, the GST Council must gear up to rectify the remaining administrative problems. The problems might even multiply once invoice matching starts. So the council must ensure that the backend remains robust and glitches do not wash away the gains of the last 12 months.