After being subject to months of haggling and histrionics, the Goods & Services Tax (GST) finally had its historic day in the Rajya Sabha with the passage of the Bill to amend the Constitution, paving the way for what is popularly referred to as the concept of “one nation, one tax.”
Taxes are without a doubt a troublesome subject for ‘aam aadmi’. It looks like a puzzle of legalese and maths, meaning not a lot. With the GST, the administration is meaning to streamline it for the overall population.
Let me give you a simple idea about GST :
GST is one indirect tax for the whole nation, which will make India one unified common market. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.
In much simpler words, the prices that we pay for goods and services have the taxes embedded in them. Mostly, the consumers are not even aware of or ignore the tax they pay for things they buy.
This is because there is a maze of indirect taxes such as sales tax, excise and VAT, which leads to increased complexity. The GST seeks to untangle this and subsume all in one single tax, thereby making India an economically unified market.
GST will reduce the overall tax incidence. Along with it, competition between the players will play a role in the reducing the prices further. This is expected to be beneficial for the consumer. An increase in consumption demand will boost the economic growth.
In the biggest tax reform since Independence, the national sales tax or GST Bill was yesterday approved by the Rajya Sabha.
This will replace a range of different state and local taxes with a single unified value added tax system, and will hopefully boost India to become one of the world’s biggest single markets.
Finally the Bill was passed as amended with 203 in favour, none against.
The AIADMK was the only party to oppose the measure and its members staged a walkout ahead of voting.
The passing of the Bill was met with a lot of enthusiasm from the Twitterati, even if they weren’t sure about what it is or how it’ll affect them.
Here are some reactions to the GST Bill on twitter :
— Amitabh Bachchan (@SrBachchan) August 3, 2016
Notwithstanding my limited knowledge of Financial stuff ,the #GSTBill is an awesome advancement for our country’s potential. Congrats to us
— Shah Rukh Khan (@iamsrk) August 3, 2016
— sachin tendulkar (@sachin_rt) August 3, 2016
GST Bill passed.India’s enormous market–a caged tiger–will now be unleashed. GoodShowTeam India!
— anand mahindra (@anandmahindra) August 3, 2016
— Arvind Gupta (@buzzindelhi) August 3, 2016
If GST only reduces the number of lines on my bill without reducing its final amount, then for me, it’s pretty pointless..
— The Kaipullai (@thekaipullai) August 4, 2016