sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
Service Tax »
 12 ways to avoid paying more for bank services
 I-T return filing: Income Tax offices, Ayakar Seva Kendras to remain open from March 29-31
 Top 5 money matters you must settle before March 31 From income tax returns to LTCG,
 Steep fines for missing March 31 income tax deadline
 CBEC clears some air on refunds under GST, central excise, service tax laws
 3 key tax changes for senior citizens which will come into effect from April 1, 2018
 Income tax returns (ITR) filing: Not filed returns for 2 years? Beware! Deadline nearing
 All you want to know about HRA: When you can claim and how it is calculated?
 Income Tax Saving: 6 ways to save tax without investing before March 31 tax deadline
 Unnable to file your tax return? Take help of these portals
 Do you know which 80C instruments can help you save tax and carry no future tax liability?

Slightly diluted GST is a better idea than current system of indirect taxes
May, 08th 2015

The Lok Sabha has passed a vital legislation to introduce a country-wide goods and services tax (GST) that would take India closer to being a unified market. A common national market is central to India’s ambition of becoming a manufacturing powerhouse and turn more investor-friendly. From energy shortages and land problems, a barrage of hurdles have kept away private investment in what should otherwise count as a massive, attractive market.

There are abundant examples that show how economies that showed potential eventually fell off because of the absence of bipartisan support to critical important policies to create jobs and push income growth. Wider consultations, as in the case of tax reforms, assist in expanding the area of the possible.

That said, a bipartisan and collaborative approach is imperative to yield the desired benefits. The GST is a case in point of how lack of political collaborative thinking had been holding up an ambitious indirect tax reform plan, which aims to stitch together a common market by dismantling fiscal barriers between states. The GST’s implementation has faced political hurdles as states fear it could rob them of discretionary fiscal powers, and reduce revenues.

The government’s acceptance of the recommendations of the 14th Finance Commission increasing the share of states in the Centre’s tax revenue from the current 32% to 42% should serve as a confidence-building measure. From the Centre’s point of view the greater transfer of funds and the resultant fiscal empowerment could well be the grand bargain for rolling out the GST.

Over the recent years, the world has been peering curiously at the stuff bubbling in India’s policy laboratory. Quick decision making and speedier implementation are vital to turning around the Indian economy, which, until recently, was an engine for global growth. The GST in its current form may have a few design flaws. For instance, for long petroleum products have remained milch cows for state governments. That status remains unchanged, at least for now.

Likewise for tobacco and alcohol. Moreover, an additional 1% tax has been imposed to compensate the so-called “producing states”. From a pure conceptual framework, these flaws run against the very idea of a common national market. But, for how long can India avoid the roll-out in its quest for an ideal GST model? A slightly diluted GST is still a better idea than the current system of indirect taxes, which is mired in a web of levies that have caused red-tape, confusion and corruption. The rough edges can be smoothened out as the system gets moving.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Vision

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions