GST implementation could happen in September itself, with the next meeting of the Union Cabinet likely to take up the matter, reports Sheela Bhatt.
After implementing the massive disinvestment programme to fetch Rs 45,000 crore, the Modi government is all set to implement the Goods and Sales Tax, known as GST, in India.
Possibly, it may happen in September itself, with the next meeting of the Union Cabinet likely to take up the matter.
The issue has been pending since more than a decade. Earlier the Bharatiya Janata Party and states ruled by it, like Gujarat, were opposing the measure, but this money-spinner tax instrument will come into force soon.
Prime Minister Narendra Modi and Finance Minister Arun Jaitley are all set to plug the leakages and tax erosion through GST.
Indian economy, according to an estimate, will gain $15 billion a year if Modi goes ahead and implements the measure in spite of concerns expressed by some states including Tamil Nadu.
If the disinvestment in blue chip public sector companies -- Coal India, ONGC and National Hydroelectric Power Corporation -- is controversial, GST will create heartburn for the smaller states who will see decreased revenues from good and services.
However, GST will help boost exports, employment and eventually growth. It aims to divide the burden of tax equitably between manufacturing and services. GST is dependent on Information technology, too. So, some states may find themselves handicapped.
More than 150 countries have different models of GST and it has been smoothly implemented.
GST will not pose an additional tax burden on individuals as such. It’s a drastic improvement over the current model of central excise duty at the national level, and the sales tax system at the state level will witness a sea-change.
If the government does implement GST, it will be the biggest ever indirect tax reform ever taken up in India.