Megha Vishwakarma (GST Expert)
GST is cited as the single biggest economic reform since 1991.
The current structure of indirect taxes in India is very complex. There are multiple types of taxes arising at different legs of the transactions. Taxes also depend on the nature of the transaction, types of commodity, state in which goods move, etc. To add to this complexity there are another hundred conditions to be fulfilled for availing credit.
To remove this complexity, GST is introduced as a single tax to replace all existing indirect taxes. This makes India a single market instead of 29 state markets. One tax shall be applicable across the States.
The significance of this change can be understood, by the benefits it can possibly bring.
- It will improve ease of doing business dramatically.
- Although short term inflation is possible, in the long term a single market will reduce costs
- Tax revenues will increase, due to increase in tax base (i.e. persons paying tax)
- Tracking transaction would be easier and black money transactions will drastically reduce
- Due to a larger single market investments in India would be more lucrative and Foreign investments in India is expected to rise.