oppn parties Welcome Solution to GST Tangle

News Snippets

  • 84 NDRF teams have been despatched to 23 states to tackle the flood situation
  • Three persons lynched in Bihar after being accused of cattle theft
  • Delhi police seize a consignment of 1500 kgs of heroin and busts a cartel of Afghanistan-Pakistan narcotics dealers with links to the Taliban
  • Supreme Court gives 9 more months to complete the Babri Masjid demolition case trial
  • Priyanka Gandhi not allowed to meet the families of the dead in the Sonabhadra firing, arrested
  • ICC inducts Sachin Tendulkar in [email protected]@@s Hall of Fame
  • Stock markets bleed for the second day. Sensex crashes 560 points
  • S Jaishankar, Minister of External Affairs, says Pakistan should release and repatriate Kulbhushan Jadhav immediately
  • Karnataka Governor Vajubhai Vala asks the Speaker to hold the trust vote latest by 1.30 pm today
  • The Government sends a list of 24 questions to mobile app company that runs video app TikTok seeking answers for anti-national and obscene content carried on the platform
  • Sarvana Bhawan founder P Rajagopal, serving a life term for murder, dies in a Chennai hospital
  • SC allows time till July 31 to the Ayodhya mediation panel
  • IT department attaches "benami" plot worth Rs 400cr in Noida. The plot allegedly belongs to BSP leader [email protected]@@s brother and his wife
  • Dawood [email protected]@@s nephew, Md. Rizwan Iqbal, was arrested from Mumbai airport as he was waiting to board a flight to Dubai
  • Trouble brews in Bihar JD(U)-BJP alliance as Bihar police asks special branch officers to keep tabs on RSS activities
Even after indicating that the trust vote will be held today (he said he cannot delay as he had to face the world), the Karnataka Speaker adjourns the assembly until Monday. Voting is likely to take place on Monday
oppn parties
Welcome Solution to GST Tangle

By Sunil Garodia

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Writes for a number of publications.
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.