Study Material | Test Series | Crash Course
Drishti IAS
call1800-121-6260 / 011-47532596
Drishti The Vision Foundation
(A unit of VDK Eduventures Pvt. Ltd.)
Current Affairs Crash Course Download Player Download Android App
Q. GST supplementary bills passed: In the backdrop of recent passage of GST supplementary bills, discuss the benefits of GST.
Mar 30, 2017 Related to : GS Paper-3

Ans :

Introduction-

Recently the lower house of Indian Parliament has passed four bills related to Goods and Service Tax (GST) and sets the stage for states to enact state laws over the next three months to roll out the new tax regime from July. GST will be one of the biggest tax reforms since independence as it will replaces multiple central and state taxes by creating single levy system, and make the country a seamless national market, boosting India’s growth rate.

Analysis-

The four items of legislation — central GST, integrated-GST, union territory-GST and the compensation Bill — provide for a peak tax rate of 40% and the establishment of an authority to protect consumers from profiteering by businesses after the tax is in place.

Input Tax Credit is unique feature of GST and it requires an unbroken chain of GST. Most businesses in India are Unorganized Sector who doesn’t pay taxes. Purchasing from them won’t have Tax Credit since suppliers as well as buyers won't allow an understatement because then, they would lose their tax credit, they tend to trade with organized sector. So unorganized sector come in purview of GST and more taxes would be collected.

With coming up of GST, businesses can concentrate on just one tax - uniform structure, same rates, rare exceptions, one agency, single compliance. The impact is not only a simplified business but also a less expensive business administration.

Savings on the tax leads to lower production costs, which in turn leads to lower retail price of Goods and Services. Such situation creates surplus disposable income for more savings and consumption. This will leads to overall growth of the economy.

Conclusion-

GST is considered as one of the biggest reforms in Indian economy. GST has several benefits and it will change the face of Indian economy. It will reduce the tax rates and will increase the tax revenue by broadening the tax base.


Helpline Number : 87501 87501
To Subscribe Newsletter and Get Updates.