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oppn parties Welcome Solution to GST Tangle

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  • 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

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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.