Boosting Growth
22/03/2017
The Cabinet has cleared four legislations for implementing GST as the government sprints to meet the July 1 schedule to rollout the indirect tax reform which can add up to 2 per cent to India's economic growth. The bills on compensating states for loss of revenue from GST rollout in first five years as well as those enabling levy of the new tax on intra/interstate movement of goods and services will be introduced in Parliament this week. The approval of Parliament, coupled with a separate one by all State Assemblies, will complete the legislative process for the roll out of one-nation-one-tax regime by merging central taxes like excise duty and service tax as well as state levies like VAT.The GST Council has already approved four-tier tax slabs of 5, 12, 18 and 28 per cent plus an additional cess on demerit goods like luxury cars, aerated drinks and tobacco products.
Introduction of GST would also make Indian products competitive in the domestic and international markets. Studies show that this would have a boosting impact on economic growth. It is expected that the implementation of the Goods and Services Tax law will lead to an increase in Gross Domestic Product (GDP) of the country by 1-2 per cent. Amalgamating a large number of central and state taxes into a single tax will mitigate cascading or double taxation in a major way, paving the way for a common national market.
The GST will thus help in the realisation of the objective of One Nation, One Tax and improve the Ease of Doing Business climate in the country. It will also indirectly benefit the common man by reducing the tax burden especially on the daily consumer items of the common man.
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