Since yesterday eve, once the Lok Sabha passed the so called GST
bill, a very pertinent question is being asked by the intellectuals of this
country as to whether GST is going to be a Boon or Bane. GST is the biggest tax
reform since our independence. Its main focus is on a single window tax
platform throughout the country and a common tax code for one and all,
irrespective of your state and place of business. This is undoubtedly going to
become a boon in long run. However initially it may have many teething problems
and make look like a bane to some. There is one faction of people who are
questioning that are we not over-celebrating the GST bill that has been passed
recently? The response to the same is YES as well as NO.
YES because we haven’t seen any major Tax reform since our
independence and GST is one such reform which is comparatively much simpler
than the current multi tax system. In simple words GST will subsume majority of
the State and Central Indirect taxes including Central Excise, Service Tax,
Additional Customs Duty or CVD, VAT, Sales Tax, Luxury Tax, Entry Tax, Lottery
Tax, Entertainment Tax and so on. In the long run GST will prove to be
beneficial. Close to 160 countries have adopted one or other form of GST. GST
will operate and be monitored through a Robust State of Art Information
Technology Network known as GSTN. This system will bring more transparency in
tax collection and will help in plugging the loop holes and tax leakages. The
Tax evasion will be easily detected and corruption index will go down. Thus GST
is a Boon and the Nation is rightly celebrating.
NO, as it’s just the first step and it’s a long way to go. In fact
it’s not the GST bill as perceived by many, it’s the 122nd constitutional
Amendment bill 2014 (now 101 of 2016) which has been passed. Apart from the
constitutional Amendment journey to the actual GST Bill and it’s simultaneous
implementation across States and Center in a synchronized manner; inter-state
differences, disputes and other complexities, the path may not be easy. It is a
road less traveled and there may be many unforeseen hurdles during this uphill
journey. The political differences between the various parties may arise during
the actual working of the GST council and the states opposing the same like
Tamil Nadu, who virtually staged a walk out from the parliament, may play a
spoil sport. Even if one or more states resist the implementation of GST in
their state, the whole process may face an inordinate delay and eventually
fatal for GST. It may turn out to be a Bane. It is the Time which will show as
to whether GST will be a Boon or a Bane. But at present let the Nation
Celebrate and move ahead with a positive frame of mind but with caution.