Gst boon or bane essay
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The scenario of differing tax rates in different states obstructs cooperative federalism.
GST will bring uniformity and also deplete the cascading consequence of these taxes by giving input tax credit, having a comprehensive tax inclusion with minimum exceptions which will in turn help the Industry to benefit from the proposed common procedures and claim credit for the tax paid.This will take place in two ways: (a) directly the resources available to the poorer states will increase substantially; (b) indirectly as the tax base becomes more buoyant.
The common base and common rates across goods and services and very similar rates across Centre and States will result in effective administration and increase compliance while also ensuring the better management of taxes collected in the State.
Also, there is a provision to maintain the requisite fiscal autonomy to the States with the power to levy additional excise taxes on certain “sin” goods like, tobacco, alcohol, etc.
The complicated tax-levy system categorized by distortions between States and Centre divides the country into separate economic zones, with the help of GST this will get transformed into one common national market.
This impedes the Make in India process which will get a boost through GST as it is making tax compliance easier removing ambiguity and at the same time, as GST will be applied on imports, domestic manufacturing would be encouraged.
Tax Governance will get a positive boost through this regime, mainly, through the feature of input tax credit.
GST will bring uniformity and also deplete the cascading consequence of these taxes by giving input tax credit, having a comprehensive tax inclusion with minimum exceptions which will in turn help the Industry to benefit from the proposed common procedures and claim credit for the tax paid.This will take place in two ways: (a) directly the resources available to the poorer states will increase substantially; (b) indirectly as the tax base becomes more buoyant.
The common base and common rates across goods and services and very similar rates across Centre and States will result in effective administration and increase compliance while also ensuring the better management of taxes collected in the State.
Also, there is a provision to maintain the requisite fiscal autonomy to the States with the power to levy additional excise taxes on certain “sin” goods like, tobacco, alcohol, etc.
The complicated tax-levy system categorized by distortions between States and Centre divides the country into separate economic zones, with the help of GST this will get transformed into one common national market.
This impedes the Make in India process which will get a boost through GST as it is making tax compliance easier removing ambiguity and at the same time, as GST will be applied on imports, domestic manufacturing would be encouraged.
Tax Governance will get a positive boost through this regime, mainly, through the feature of input tax credit.
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