The Goods and Service Tax (GST) bill passed in Rajya sabha on this Wednesday 7th of August, AIADMK is the only party that hindered this bill claiming it’s unconstitutional and the MPs of this party walked off during the polling was taking effect. This would put back a raft of different states and local taxes with a single cohesive VAT system to turn the country into a giant single market. With this bill crucial constitutional 122th amendment will turn the bill into law. The Lok Sabha has already passed the pivotal bill. 202 members of parliament voted in the favor of this bill while 13 disagreed to affirm after 5 hrs long debates, where there were influences from ruling and opposition discussing on the bill and its various amendments. The Govt. is targeting April 2017 for GST to be in place. GST is designed to be completely electronic (no manual filing of returns).
What history says– ‘One India, one tax- was envisaged and contemplated by ABV back in 2000, was proposed by UPA alliance. At that time NDA supporting states was outright against it. For approving GST central Govt. has to clear the pending Central Sales Tax. But it was somehow pending for a long time. For Gujrat and other states turned a deaf ear to this proposal. When Modi Govt. came into central power, they pledged to pay the due CST in three installments of which two have been paid and one part is outstanding as of now. Finally after long speculation, the GST pushed as the biggest tax transform in India since independence.
Impact on regular tax plan– Experts are saying that GST will bring much positivity in Indian GDP. It would uplift annual GDP by one to two percentage points. The inadequacy of the current system leads collecting a lot of tax to run an errand, while a section of market supports local protectionism. The top business houses are keen on GSP, as present situation is not allowing companies to flourish their sale. GST will help them to grow in the mainstream economy. This will bring many business transactions and widening the tax base. A GST Council will be set up, with ministers from both of central and local government to execute the tax.
Source- LNN (Liyans News Network)