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    GD Report

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    Shwetha Sk

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    GD Report

    Uploaded by

    Shwetha Sk
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    GD REPORT

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    GD Report

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    IS GST REALLY A ONE NATION , ONE TAX SYSTEM ?

    Swetha Suresh Kumar


    BBA LLB (Sem 9)

    INTRODUCTION

    The Goods and Services Tax (GST) is an indirect tax that has fundamentally changed the

    taxation landscape in India. The notion of introducing a unified Goods and Services Tax (GST)

    in India was initially presented in 2000, when then-Prime Minister Atal Bihari Vajpayee formed

    a committee to develop a GST model for the country. The discussions and developments related

    to GST continued throughout the years, with different governments attempting to refine the

    framework. It wasn't until 2006, when then-Finance Minister P. Chidambaram said in his budget

    speech that the government planned to adopt GST on April 1, 2010. However, even then due to

    political conflicts and practical challenges, the implementation was delayed.

    The final push came from the Modi government, which took major steps to address these issues

    and pass the legislation. Following which, the Parliament passed the GST Bill in 2016, and the

    new tax system went into effect on July 1, 2017. Its purpose was to simplify the tax system by

    replacing a myriad of indirect taxes such as service tax, excise duty, and value-added tax . The

    introduction of GST has garnered mixed responses. Many are in favor of the system due to the

    simplicity it has brought into tax payments. Businesses, particularly those involved in

    manufacturing and services, have benefited from GST as it has reduced the burden of multiple

    taxes, making compliance easier. The system has also been praised for encouraging foreign

    investment, as many global businesses are already familiar with similar tax systems in their

    home countries. Further, the implementation of GST has increased the number of taxpayers and

    made it more difficult to evade taxes, thus boosting government revenues. This increase in

    1
    revenue has contributed to national development, with funds being used for various

    infrastructure and welfare projects.

    A NEW CONCEPT

    One of the game changers of GST was the introduction of a new concept named “one nation, one

    tax” philosophy, which aimed at unifying the country under a single taxation system, thus

    eliminating the complexities of having different taxes across states and sectors. It also ensures

    that goods and services are taxed at uniform rates across the country, leading to a more

    transparent and streamlined process for both businesses and consumers. However, not everyone

    is equally satisfied with the GST system. Some critics point out that GST has increased the

    overall tax burden on certain goods and services. For instance, prior to GST, tax rates for many

    items were between 8% to 15%, but with GST, the rates now range from 0% to 28%, depending

    on the product category. While basic necessities fall under the 0% tax bracket, luxury items are

    taxed at 28%, which some argue is too high. The higher tax rates have particularly impacted

    industries such as automobiles and electronics, where consumers now have to pay more for

    products that were previously taxed at lower rates.

    Another point of criticism relates to the implementation of GST at the state level. The system

    requires both Central GST (CGST) and State GST (SGST) to be collected on transactions, which

    has caused some friction between state governments and the central government. States

    previously had the autonomy to set their own tax rates and collect revenues, but with GST, a

    significant portion of the tax is now controlled by the central government. This has led to

    concerns over the unequal distribution of GST revenues, with some states feeling that they are

    not receiving their fair share of the funds collected.

    2
    The additional accounting and compliance burden that GST has introduced cannot be

    overlooked. Businesses, especially small traders and startups, have to file regular returns and

    deal with frequent changes in the system, such as filing monthly or quarterly returns and

    reconciling their accounts with the GST portal. Non-compliance can result in penalties, late fees,

    and interest charges, adding to the challenges faced by smaller entities. While large businesses

    with robust accounting systems have been able to adapt, smaller traders often struggle with the

    administrative demands of GST, which has been a point of contention. From a broader

    perspective, while GST has succeeded in reducing corruption in tax collection by making the

    process more transparent and accountable, there are still concerns about its overall impact on the

    Indian economy. Some argue that GST has led to increased costs in certain areas, especially for

    businesses dealing with goods that fall under higher tax brackets. Additionally, critics point out

    that although GST has curbed tax evasion to some extent, other forms of corruption remain

    rampant in different government departments, where bribes and delays are still prevalent.

    In conclusion, GST has brought a mixed bag of advantages and challenges to India's economic

    system. It has undoubtedly simplified the tax structure and promoted transparency, but it has also

    introduced new complexities, particularly for smaller businesses and individual consumers. The

    long-term effects of GST on India's economy remain to be fully realized, but for now, it stands as

    a major reform that has reshaped the way taxes are collected and distributed in the country.

    Going forward, addressing some of the shortcomings, such as simplifying compliance for small

    businesses and ensuring equitable distribution of tax revenues, will be important in maximizing

    the benefits of GST for all stakeholders

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