It is almost 7 years since the announcement of introduction of GST (Goods and services tax) by the then finance minister Mr Chidambaram in 2007-08 budget, but tragedy of reforms in India is that the bill is still pending.
What GST stands for?
GST is a value added tax which is planned to replace all indirect taxes levied on goods and services by the Indian central and state governments. It is aimed at being comprehensive for most goods and services. India is a federal republic, and the GST will thus be implemented concurrently by the central and state governments as the Central GST and the State GST respectively.
Critics claim that CGST, SGST and IGST which will be part of GST are nothing but new names for Central Excise/Service Tax, VAT and CST and hence GST brings nothing new to the table.
Advantages of implementation
Exports will be zero-rated and imports will be levied the same taxes as domestic goods and services adhering to the destination principle.
Hope from the current majority government
Biggest hurdle in the implementation of GST was its appeal to be “anti-poor”. Hence a coalition govt in the past from 2000 to 2014 were not willing high enough to implement these taxes. Since, for the first time since 1984, union govt is run by a party which has a full majority, let’s hope that current govt headed by ambitious Prime Minister Modi implements the pending GST.