Reliving India’s tryst with destiny at the midnight of 15th August 1947, the Parliament’s Historic Central Hall hosted the inauguration of the Country’s biggest ever tax reform- The Goods and Services Tax. PM Modi announced that the GST would contribute to the welfare of the people and also put an end to tax terrorism, corruption and black money.To fulfill the dream of “One Nation, One Tax” , the government abolished the multiple central and state taxes and cesses.
However, the government made the citizens aware of the fact that there would be some shortcomings and difficulties in the shorter run but all those would ultimately benefit the nations economy in the years to come.
When the GST was rolled up, prices of commodities were expected to come down for the consumer’s benefit. The 5 Tax Slab Structure – 0%,5%,12%,18% and 28% was designed to put all the items on the basis of necessity, essentials, standard and luxury.
Although in the recent quarter, the economy growth has slowed down to 5.7% for which the opposition leaders and many renowed economists blame the in haste implementation of GST and failed demonetisation, the central government believes that the country will benefit in the long run.
GST, till now, hasn’t impacted very well on the economy as the recent results have negatively effected the growth rate. But GST, for instance, has impacted the consumers on a large basis. From dining out in restaurants, buying watches or using consumer goods, the tax rates for several products have come down, most of the products fall in the 5% and 12% category, 28% being reserved for luxury items amounting to 50-55. While for eating out at restaurants , for instance, the Government reduced the tax rate from 18% to 5% mainly to benefit the consumers. However, the government used to give “Input Tax Credit” (ITC) to the restaurants, which was withdrawn at the behest. Therefore, the restaurants in order to compensate for the same have increased the prices in their menu, thus again bringing a hole in the pocket of consumers. This has surely contradicted the government’s main objective to pass on the GST benefits the consumers.
FMCG products, Daily usage products and standard household items have been relatively kept at low rates to keep the tax structure consumer and budget friendly.
Hence, I, as a citizen of India, feel that the GST is a gamechanger step by the central government and will prove to be a major boost to the economy and its citizens in the future years to come.
As India is currently the 2nd fastest growing economy after China in the world, it needs to adapt and adopt several economic boosts like the GST in future in order to tackle the growing menance of Tax Evasion, Black Marketing and counterfeit currency.