GST

Government of India have decided to start GST (Goods and Service Tax) bill from July1, 2017. The GST bill’s main essence to club all indirect taxes into a single one to carry inter business and transition smoothly. No octroi, no local tax, no state government imposed tax etc will remain after starting the GST. And Finance ministry have calculated that 2% GDP can be added after starting GST.

The american ASG analysis had explained about Indian GST bill as follows.

  • On Wednesday, August 3, the upper house of India’s parliament passed a nationwide Goods and Services Tax (GST) constitutional amendment which marks one of India’s most significant economic reforms since Indian independence.

  • The new tax regime will streamline a multitude of complex, often-overlapping state and national taxes, significantly increasing predictability and transparency for foreign investors, particularly those engaged in intrastate commerce.




  • On Wednesday, August 3, the upper house of India’s parliament passed a nationwide Goods and Services Tax (GST) constitutional amendment which marks one of India’s most significant economic reforms since Indian independence.

  • The new tax regime will streamline a multitude of complex, often-overlapping state and national taxes, significantly increasing predictability and transparency for foreign investors, particularly those engaged in intrastate commerce.




The interesting feature of the bill is that who pay indirect tax? Does it pay any manufacturer or any trading house or any financial institution?


The indirect tax is the big burden on common poor people which impose on service tax, any cess, octroi etc. Just imagine, 1.3 billion people are paying indirect tax daily. How?

When you are consuming or using any service the price is included with service tax or octroi or any cess. No mercy to poor. Compulsory tax regime.

Who will be benefited? Naturally businesses will be benefited because they have to pay single tax instead of multi tax, some of those taxes could not include in the M. R. P of the end product. Value addition will be treated once not in multistage. 

Will price of products go down? The simple answer is no witnessing various previous experiences.

One example is enough to establish this point, when fuel price was going up the tariff of energy or public transport system variably went up but when the fuel price was dropped the tariff did not drop reciprocally.

Will GDP enhance or not time will say, because GDP depends on various factor, not a singular factor of enhancing revenue to the government. Expenditure is another big factor in GDP calculation.

Expenditure does not mean to develop some new roads, new bridges, new railway track, new bullet train or achievement of Isro. Expenditure means how much job this government will be creating?

So, I am not hopeful with this GST bill rather I would be pleased to make ease doing business in India by implementing single license instead of multi licenses e.g. trade license, company registration, ST, IT, VAT registration, fire license, clearance from environment department, license from L & LRO, lube license, explosive license, hazard license, drug license, PF tax registration, PF & ESI registration for employees, and taxes as wealth tax, land revenue tax and above all SERVICE TAX.

How Indian industries claim service tax where service is interrupted and there is no refund option to common people as enjoyed the businesses of refunding tax after so called assessment.





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