{"id":152717,"date":"2021-12-11T20:43:49","date_gmt":"2021-12-11T15:13:49","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=152717"},"modified":"2021-12-14T16:04:09","modified_gmt":"2021-12-14T10:34:09","slug":"goods-and-services-tax-as-an-unfinished-agenda","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/goods-and-services-tax-as-an-unfinished-agenda\/","title":{"rendered":"\u201cGoods and services tax as an unfinished agenda\u201d"},"content":{"rendered":"\n

News<\/span><\/b>– GST was launched in July,2017 with the vision of\u00a0\u00a0<\/span>\u201cone nation one tax\u201d, it has seen quite some adaptations since then but still lacks in some key aspects.\u00a0<\/span>\u00a0<\/span><\/p>\n

What was the vision behind GST\u2019s Introduction<\/span><\/b>\u00a0<\/span><\/p>\n

It was expected to improve tax-GDP ratio, end tax cascading, enhance efficiency, competitiveness, growth, and ensure lower prices. Many exemptions, along with different tax\u00a0rates,\u00a0have\u00a0been accommodated to protect the interests of different stakeholders.<\/span>\u00a0<\/span><\/p>\n

What are key features of GST\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n

1)<\/span>GST Council and GSTN<\/span><\/b>-Its Foundation is built on GST Council and the GST Network (GSTN). While the former is the key decision-making body, chaired by the Union\u00a0Finance, the\u00a0latter generates high-frequency data and subjects them to analytics for informed policymaking.\u00a0<\/span>\u00a0<\/span><\/p>\n

2)<\/span>Revenue neutrality and GST compensation<\/span><\/b>\u00a0for the States serve as its two key pillars. Although assured revenue neutrality remains a mirage and many States have experienced a declining tax-GDP ratio<\/span>.<\/span>\u00a0<\/span><\/p>\n

3)It is a\u00a0<\/span>destination-based<\/span><\/b>\u00a0<\/span>consumption taxation<\/span><\/b>, with\u00a0<\/span>input tax credit.<\/span><\/b>\u00a0<\/span><\/p>\n

4)GST is\u00a0<\/span>applicable to all goods and services except alcohol for human consumption<\/span><\/b>\u00a0and\u00a0<\/span>five specified petroleum products<\/span><\/b>.<\/span>\u00a0<\/span><\/p>\n

International experience and need for improvement in GST<\/span><\/b>\u00a0<\/span><\/p>\n

1)\u00a0GST could be improved by\u00a0<\/span>limiting zero rating, tax-exemptions and harmonising tax rates<\/span><\/b>.\u00a0<\/span>\u00a0<\/span><\/p>\n

2)\u00a0Experience of other countries indicates that transfers\u00a0<\/span>through\u00a0<\/span>social security or subsides tend to be more progressive than subventions or exemptions. It is\u00a0<\/span><\/b>because reduced rates or zero rating do not usually get passed on to target groups or<\/span>\u00a0industries as happening in India.<\/span>\u00a0<\/span><\/p>\n

3)\u00a0GST is shared equally between the Centre and States despite\u00a0<\/span>two expert committees recommended for<\/span><\/b>\u00a0<\/span>a higher share for the States<\/span><\/b>.<\/span>\u00a0<\/span>Also,\u00a0GST compensation has also recently gone through much debate and controversy,<\/span>\u00a0this\u00a0is not conducive to sustainable co-operative federalism.<\/span>\u00a0<\/span><\/p>\n

4)\u00a0GST is sometimes seen as\u00a0<\/span>discriminatory to manufacturing States<\/span><\/b>, indicating the need for a revenue sharing formula that duly incentivises exporting States.<\/span>\u00a0<\/span><\/p>\n

5)\u00a0Need for\u00a0<\/span>swift and transparent functioning of the input tax credit system<\/span><\/b>\u00a0through a flawless IT infrastructure<\/span>, the\u00a0<\/span>massive and invaluable data being generated via GSTN has to be put to effective use.<\/span><\/b>\u00a0<\/span><\/p>\n

GST should be seen purely from a revenue point of view and as a fiscal policy tool for efficiency, competitiveness and growth.<\/span>\u00a0Profiteering and cascading will prevent both states and consumer to take true advantage of GST and also prevent the true vision behind GST to become a reality.<\/span>\u00a0<\/span><\/p>\n

Source<\/span><\/b>-This post is based on article \u201cGoods and services tax as an unfinished agenda\u201d Published in The Hindu on 11 Dec 2021<\/span>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

News– GST was launched in July,2017 with the vision of\u00a0\u00a0\u201cone nation one tax\u201d, it has seen quite some adaptations since then but still lacks in some key aspects.\u00a0\u00a0 What was the vision behind GST\u2019s Introduction\u00a0 It was expected to improve tax-GDP ratio, end tax cascading, enhance efficiency, competitiveness, growth, and ensure lower prices. Many exemptions,… Continue reading \u201cGoods and services tax as an unfinished agenda\u201d<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[8942,10317,216,3203,8788,10498],"class_list":["post-152717","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-fiscal-policies","tag-good-and-services-tax","tag-gs-paper-3","tag-gst","tag-mobilisation-of-resources","tag-the-hindu","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/152717","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=152717"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/152717\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=152717"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=152717"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=152717"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}