oppn parties Welcome Solution to GST Tangle

News Snippets

  • Calcutta HC says Cricket Association of Bengal is not liable to pay tax on advertisement inisde Eden Gardens cricket ground as it is not a 'public place' because it does not have unrestricted access for the general public
  • Supreme Court admits a plea from a child of a single OBC mother who had applied for an OBC certificate for her son
  • Supreme Court approves applying strict preventive detention laws for 'cybercriminals'
  • SBI likely to shift part of operations of its Global Market Unit from Kolkata to Mumbai
  • FM nirmala Sitharaman calls for a "structured, process-driven approach to compliance" and asks top I-T officials to speed up refunds and simplify processes
  • Marine insurance costs surge as the oil corridor in Strait of Homruz becomes risky due to war
  • Stocks weaken on Monday on global cues: sensex sheds 511 points to 81896 and Nifty 140 points to 24971
  • Former left-arm spinner Dilip Doshi dies in London at 77. He played for India in 33 Test matches and for Bengal in domestic tournaments
  • Pant becomes the only keeper to score two centuries in the same Test in England
  • England Test: Rishabh Pant hits his second ton and KL Rahul a classy century to put India on top, England need 350 runs on the last day, with the ptich showing signs of wear and tear
  • DGCA orders an audit of the entire aviation ecosystem in the wake of recent snags in many flights after the AI Dreamliner crash in Ahmedabad
  • 2 Pahalgam residents arrested by NIA for sheltering and aiding 3 terrorists who killed civilian tourists in pahalgam tell the agency that there were 3 LeT ultras from Pakistan that carried out the attack
  • India unlikely to agree to US demands for lower tariffs on agri products and GM food, trade deal faces fresh hurdles
  • Stocks likely to plummet today as traders will be worried about the effect of US strike on iran, oil price rise and possible inflation. Foreign funds may also withdraw in the volatile global situation
  • Oil prices likely to shoot up as US strikes at iran and the latter decides to close the Strait of Homruz
US President Donald Trump unilaterally announces a 'ceasefire' between Israel & Iran
oppn parties
Welcome Solution to GST Tangle

By Sunil Garodia
First publised on 2017-01-17 19:45:26

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator.
The GST tangle seems to have been solved with the pending contentious issues finding a solution. Although the date has been pushed back to July 1, 2017 it is better in a way because by then, expectedly, the confusion created by demonetization will be over and done with and the economy will be ready to shift to something as dynamic and forward-looking as the GST.

There were two major issues that were holding back the GST. Both the Centre and the states wanted to have jurisdiction over the small enterprises and high seas sales. Under the deal reached, the states will assess 90% of those with turnover under Rs 1.5 cr and the rest will be assessed by the Centre. Both the Centre and the state will share control over those having turnover in excess of Rs 1.5 cr., with the finance minister clarifying that each assessee will be assessed by only one authority. High seas sales will be assessed by the states in a major concession by the Centre.

West Bengal stuck out like a sore thumb, protesting against the deal but its stand was neutralized as all other states agreed to the formula that was worked out. It is sad that despite being in the forefront of the GST implementation (successive finance ministers from West Bengal have chaired the committee tasked with drawing up the modalities of GST), West Bengal objected to the final decision. This was only due to changed political equations and not due to economic considerations.

GST is a major reform that will turn India into a common market by removing a plethora of indirect taxes by both the Centre and the states. It will also remove tariff barriers that prevent free movement of goods. Further, it will act as a disincentive to do illegal business as input tax deduction will not be available if materials are sourced from illegal sources, making the final product costlier and uncompetitive.

GST has the potential of bringing a huge number of units in the informal sector to the formal economy, thereby boosting revenues and clamping on generation of black money. Further, transparency in taxation and administration will do away with frequent disputes with assessees. Of course there will be some teething problems initially, but once everyone gets the clear picture, India will do better business and the governments will collect more tax.