Why GST Is A Game Changer
Like any bold step there are hiccups, there are naysayers who will try to derail the move, but as the rising Sensex suggests the global investors have given a thumbs up to the move, and new India is embracing it with open arms
Photo Credit : Tarun Gupta
The Narendra Modi government’s quest for India’s integration into a global economy has led to a new tryst with destiny on the midnight of 30 June and on 1 July with the birth of GST (Goods and Services Tax). India became a country with ‘one nation one tax’ which is a well thought out move and will boost investor confidence in India.
It also underscores the PM’s image as a bold leader and a doer who has shown a vision for India in the last three years and has gone ahead and implemented the pivotal move.
GST would also make movement of goods more efficient from state to state and will be a boon to the logistics sector. It will also create more employment and will make businesses grow by making them more competitive.
It is also a great move to ensure good centre state relations where there is cohesion on economic policies despite the political divide. It sends a message to the world that from Jammu & Kashmir to Kanyakumari, India is one nation and one tax. It also reaffirms the government’s reforms agenda and like the PM’s bold demonetisation initiative, it will help in curbing corruption.
Like any bold step there are hiccups, there are naysayers who will try to derail the move, but as the rising Sensex suggests the global investors have given a thumbs up to the move, and new India is embracing it with open arms. Here are the top ten reasons why GST is a game changer:
1. Ends several indirect taxes for unified tax structure on all goods and services
2. Simplifies tax revenue distribution between Centre and State. For example: 18 per cent = 9 per cent CGST and 9 per cent SGST
3. Removes internal tariff barriers to promote domestic trade and business
4. End to tax disparities between states with one set tax rate
5. Transparency for consumers on taxes paid on goods and services
6. Both federal and state govts can tax entire value chain of production of goods and supply of services
7. Tax revenue will increase as informal economy joins formal economy. This will increase spending capacity of federal and state govts and accelerate GDP growth rate
8. GST is expected to promote the manufacturing sector, thus boosting exports by making production more competitive and creating more jobs in the economy
9. Ease of doing business could improve as corporations will only need to pay one tax in place of several multilayered taxes
10. Tax exemptions will also be reduced as the GST system is improved in the years to come, thus increasing govt’s tax base from goods and services.
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