GST has been storming the nation and the market with questions whether the move would turn out to be a game changer or a mere flash in the pan. The answers might be discovered as this article evolves, and if not, wait and watch is always the best way out. The Bill is on the final lap in its race to a unanimous approval by the House and is expected to emerge a winner during this Parliament session.
The romance of the GST and the Market:
Indian Markets have been watching closely, every move of the coveted GST bill even as statistics suggest that the implementation of the bill will boost the business environment of the country. Streamlining the Tax Structure by implementing the GST Bill would invariably offer the much-needed reform fillip the NDA led government was looking for. The failure to pass GST would adversely impact the growth prospects of the Indian markets as the bill holds the key to a steady rise in the inflation guidance of the Indian Economy. The implementation of the bill is also expected to add momentum to Prime Minister Narendra Modi’s “Make in India Project” which promises to propel the subcontinent as the growth engine of the Global business fraternity.
While some reports claim that GST is a silver bullet, there are others who believe that the bill needs to be designed with the target of India’s long-term growth in the next two decades or so. The actual effect of GST bill will take the time to reflect itself. After the bill is implemented, the bill will boost earnings in the logistics, transportation, and manufacturing sectors.
What’s in for the State?
The GST bill merges the service tax levied by the center and the VAT levied by the state into a single tax model. Statics suggest that the implementation of the GST bill would result in 2% GDP growth of the Indian Economy. In the event of states losing out in their earnings pie due to the implementation of the GST bill, the center has promised to compensate the states for their respective losses for the next five years. One of the primary goals of GST is to eradicate the unwanted implementation of double taxation. This, in the long run, would boost the business sentiment of the country by ensuring that consumers are rewarded with value for their money. GST will ensure that the center would share a part of the revenues generated from corporate income tax and customs duties with the states.
Economy under the wings of GST:
GST is seen to be benefiting the economy in more than one ways over a period. The bill is capable of covering all the loopholes in the present tax structure. This will, in turn, trim down the inefficiencies of the trades in India, increasing the productivity of the economy. It will also increase the efficiency by simplifying the supply chain and reducing the logistics cost and tax rates in broad categories. The large number of businesses, which were exempted earlier, will enter into the tax systems. The simplified indirect tax regime will result in easy tax compliance and lower cost.
The twists and turns in the story of the GST bill have cleared some doubts. But there are some others as well that have been kept on hold. If sincerely implemented, the bill can transform the complete economic landscape of the country. If there is a robust technological platform in place, the dream of a single market can be realized in the next financial year. But it needs the government to work on the war footing. The bill is yet to unfold all its cards on the table.