The story of economic reforms was started in 1991 by Dr. Manmohan Singh, the then Finance Minister and now Prime Minister, will culminate with the introduction of Goods and Services Tax (GST) and a ne
I am sorry to say but it is truth that the economic reforms started by late p v narsimha rao, but nobody is remembering him this is the fate of the south indian political leaders.
The fact that GST as an efficient modern tax system would curtail inefficiency of VAT, compel better compliance, reduction in transactional cost and confirm buoyancy in revenue. Quite notably, bringing of GST into being will result in automatic compliance and also encourage documentation. As per it, unless an invoice for subsequent sale is issued by a dealer GST paid on purchase will become a sunk cost in the hands of such dealers. The effect of this, as the authors view; will force the dealer to issue invoice and route transactions through book of accounts. The 'Book of Account' as a piece of material evidence will also help the Federal Government not only combating black money but ripple effect will also bring buoyancy in other taxes, for example, income tax. The case studies and research of implementing various provisions of tax such as the VAT have shown us the way for further reforms. Relying on recommendations of the above stakeholders, they say the following structure of GST is emerging; (a) CGST: Federal Tax, to subsume excise duty and service tax; (b) SGST: State Tax, to subsume VAT, entry tax, entertainment tax and other State levies; and (c) IGST: administered by the Federal Government to levy GST on inter-state sales transaction of the goods. Let us be optimisic about it.
This one piece of legislation is going to have a significant impact on our economy. Based on estimates I have heard, it is estimated that the introduction of GST itself could increase our GDP by about 1 full percentage point.CHEERS......
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