The ‘presently’ mammoth term GST stands for Goods and Services Tax. This reform is assumed to make life simpler for tax payers, specifically business, exterminating all the complexities of multi level indirect taxes in India. Indirect taxes typically encompass excise duty, VAT, customs duty, CST, Service Tax, Entertainment Tax. All these taxes shall be replaced by one single GST.
“Although some uncertainties remain around the design and pace of implementation of the GST, its adoption is poised to help raise India’s medium-term GDP growth to above 8% as it will create a single national market and enhance the efficiency of intra-Indian movement of goods and services,” the IMF said in its annual country report on India. (Source: Mint , Feb 22 2017)
The red carpet is laid! GST is all set to tread it down. A big feather in our country’s cap! After a lot of deliberations, apprehensions, rejections, oppositions and finally consensus amongst out political fraternity- with a gamut of pros in its stride!
The efforts are on at the Centre to make it as comprehensive and straightforward as feasible (without realizing that the straight forward alleys are intertwining radically!). The GST Council has been juggling with the tax rates to make them most competitive and receptive to the masses and the business.
This tax structure has been inviting a fair amount of attention from all sectors of the economy .On one hand, at the macro level, the buzz is about GST giving a refurbished façade to the long prevailing complex indirect tax structure of our country with an array of benefits up its sleeve.
On the other hand is the highlight of this write-up- the consumers’ impromptu premonition that has gone unnoticed or maybe, has been deliberately sidelined in the wake of the long term positives of GST. On the face of it, the consumers’ responsiveness to this reform has been assorted - the concoction having a higher percentage of resentment than excitement so far. From consumers’ version of GST till now, it will be another millstone around their pockets which have already been ailing for couple of years under high inflation, a reason that has directly impacted them apart from the trickledown effect of various financial and economic situations (tyrannies)at national and global levels.
Well, it is completely agreeable that consumers are being myopic in terms of believing that GST is going to make the hole in their pockets bigger. However, since there exists an irrefutable relationship between the consumer, business and indirect taxes, the ultimate economic burden of the taxes is borne by the consumer. This, arguably, makes the consumers’ skepticism pertinent considering that the Indian market is extremely price sensitive.
Icing on the cake is that, as expected, retailers are cashing on these conceivably ephemeral apprehensions of the consumers in pushing their products through before the implementation of GST! This sure must be adding oil in the fire and somewhere must be broiling negativity amongst the masses.
Now the question arises: Is GST a new concept globally?
GST was first introduced way back in 1954 in France with the purpose of reducing tax- evasion. More than 140 countries have implemented GST since then with some countries having Dual-GST (e.g. Brazil, Canada etc.) model. India has chosen the Canadian model of dual GST.
‘'All around the world, GST has the same concept. In some countries, VAT is the substitute for GST, but conceptually it is a destination based tax on consumption of goods and services.’' (Source: Financial Express, July 2016)
With globalization comes the concept of sharing knowledge and best practices. A time tested and proven practice existing in the world for years together being embraced by us now should ideally be considered a revolution and deserves our wholehearted support !