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बेसिक इंग्लिश का दूसरा सत्र (कक्षा प्रारंभ : 22 अक्तूबर, शाम 3:30 से 5:30)
Q. GST reform at risk: Discuss the issues related to implementation of Goods and Service Tax from coming financial year.
Dec 09, 2016 Related to : GS Paper-3

Ans :

Introduction-

Goods and Services Tax (GST) is a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India. Recently GST bill has been passed and it will come into effect from 1st April 2017. But many observers keeping their fingers crossed about sticking to the targeted date to implement the GST regime.

Issue-

  • GST council has already met thrice, but they failed to resolve an impasse between the States and the Centre on who would have administrative control over taxpayers in the new tax regime.
  • Central government has proposed a dual control model where both vertically split the taxpayer base for administrative purposes. But some States are keen to retain control over all goods and services providers with an annual turnover of less than Rs.1.5 crore.

Analysis-

  • The GST council met thrice, where centre tried to build the consensus, but the States hardened their position by flagging the loss of revenue on account of the demonetisation of high value currency notes.
  • There is an urgent need to build consensus on the above matters, and States and centre may have to be more generous in responding to their demands.
  • For that centre should legalise the compensation aspect by passing a law in parliament, so that states will get statutory support for their loss of revenue.
  • To implement such big ticket reform, centre should take states on board, getting the new regime going in the middle of a financial year would inspire less confidence than otherwise.

Conclusion-

Ongoing tussle between centre and state is headache is for industries, taxman and even all governments. Government and opposition ruled states must try to build consensus on contentious issue of administrative control over taxpayer. Such a big ticket reform should not be derailed for narrow political interest, else investors will lose confidence over Indian economy. 


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