GST IS BENEFICIAL FOR THE GROWTH

OF INDIAN ECONOMY

India is known for its unity in diversity where people with diverse culture
backgrounds co exist in harmony. India is at a position where the world is looking
it as a major economic power and all the ingredients are able to convert our
nation into one soul quickly.
From financial and growth perspective it may be derived that india has united
once again to emerge as a single market with the passage of GST bill.
"Goods and Services Tax" is a comprehensive indirect tax on manufacture, sale
and consumption of goods and services throughout India, to replace taxes levied
by the central and state governments. Goods and Services Tax would be levied
and collected at each stage of sale or purchase of goods or services based on the
input tax credit method.

The GST bill was first mooted in 2000 under the NDA government and the GST
framework has been under develeopement since then. Significant efforts have
been made during the last 2 years for the passage of the bill a collective
responsibility and achievement. Parliament has passed the 122nd Constitution
Amendment Bill to make changes in the power of the Centre to levy taxes like
excise, and those of states to collect retail sales taxes .
GST is viewed as potentially transformative for India's economy that could add as
much as 2 percentage points to the GDP, while improving the ease of doing
business and encouraging investment in manufacturing.
GST will replace more than a dozen central and state levies, including central
excise, service and sales tax as well as VAT on sale of goods and entry tax, to
make movement of goods seamless across the 1.3 billion strong market. Instead
of the goods being taxed multiple times at different rates, under the new GST
regime they would be taxed at point of consumption.
Both centre and state will levy simultaneously GST across the value chain.
Centre would levy tax and collect central goods and service tax and state would
levy and collect the state good and service tax on all transactions within a state.
The complex and cumboresome tax system which has pushed entreprenuers to
limits in order to abide by all the laws laid by authorities at central and state
level will be histroy soon. Certain skilled labour intensive industries which were
not able to offer high quality products and services to other states due to the
complex web of taxation will now be able to have its skilled labour at one factory
and can open up retails in all important markets and ship from anywhere to
anywhere.

This will definitely open up internal competiton and increase the quality of
product and services for end users.

GST covering all goods and services with tax only on value addition and set offs
against taxes on inputs/previous purchases.Right now we have more tax on
fewer items with GST there will be less tax on more items .
Ceretain growing industries which needed a transformational restructuring of the
tax regime shall enjoy the GST proposition better . Once the awaited and amiable
GST network is up and running the applicable taxes will be paid by the
manufaturer right at the factory level itself and will abolish the border taxes paid
for transport of goods from one state to another.
Some states wich were poor during independence are still poor and are not able
to align themselves on the growth trajectory, with the GST these states will get a
higher and well managed prosperity fund which could bring them to next level of
economic developement such that they are providing an environement for
manufaturers to flourish.
It wil, always be manageable for any company to pay one tax rather than current
tally of more than 15, depending on their business and territory. The initiative
have the potentials to make INDIA unified and a top economic power.
In a highly developed open economy with a high and growing service sector a
change in the tax mix from income to consumption based taxes is likely to
provide a fruitful source of revenue.
It is an important milestone in the journey to create a common market in india by
demolishing the silos within which indias indirected tax system operated. The
anticipated outcome an economic boost and a reduction in incidence of tax for
consumers will be realised only when then next stage is handled by matuarity.