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Q. Urgent need GST implementation: Discuss the urgent need of implementation of GST laws in India.
Mar 06, 2017 Related to : GS Paper-3

Ans :

Introduction-

Recently the Goods and Services Tax (GST) Council has reportedly approved the draft Central GST and the Integrated GST laws, which are necessary to implement the proposed GST. It would enable the Centre to introduce the legislation in Parliament and the council is expecting to finalise the model state GST law in the month of March.

Analysis-

  • Now all state governments have to pass the state GST law and all rules of all laws have to be finalised and published. Because organisations need some time to switch their accounting systems to switch to GST. 
  • Under the GST, the Indian economy will become more formal and organised, more products and services will come under it. It creates audit trails that would widen the tax base, which in turn helps in bringing rates down.
  • The model GST law must have commodity-specific rates approved by Parliament. A peak rate of GST at 40%, instead of the earlier agreed upon rate of 28%, is a bad idea.The council must stick to the original four-rate structure ranging from 5% to 28%. 
  • In proposed system, excluding real estate, electricity, alcohol and petroleum products is not good idea. Hence subsuming all indirect taxes is the way to go, because the greater the coverage will brings down tax rates.


Conclusion-

The recent news of approval of the draft Central GST and the Integrated GST laws by the GST council is welcome move in the implementation. Now all states must pass states GST laws to implement GST soon. As organisations require time switch to GST accounting system, hence central and state governments should complete all pending aspects of GST soon.     


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