At the stroke of midnight hour, when the world sleeps, India will awaken to economic reforms and a faster pathway to development. It is fitting that at this solemn moment, the introduction of the GST will be commemorated by a loud gong, which shall echo in new changes and national progress. Yes, there exists a strong resonance of Jawaharlal Nehru’s ‘Tryst with Destiny’ speech in this unprecedented journey to economic progress.
On the midnight of June 30th, the most significant economic reform since BJP’s rise to power will receive the official green light for implementation. The Goods and Services Tax (GST), which has been under the wraps for a few years now, will mark its rollout by a special midnight session in the Parliament. Both the Houses of the Parliament will meet to collectively welcome the economic change at the Central Hall, with the President Pranab Mukherjee, Prime Minister Narendra Modi, and Finance Minister Arun Jaitley addressing the assembly from 11 p.m. on June 30th till 12:10 a.m. on July 1st.
What is GST?
The Goods and Services Tax (GST) is touted to be the harbinger of a dramatic makeover of the Indian economy. The tax aims to unify a web of taxes which are currently levied on the Indian consumers, including the VAT, excise duty, and service tax. A four-rate structure that imposes a low rate of tax of 5 per cent on essential items and the top rate of 28 percent on cars and consumer durables has been finalised. The other slabs of tax are 12 and 18 per cent.
When is it launching?
After smoothing over the major stubs on the way, the tax is all set to be launched on the midnight of June 30th and July 1st at the Central Hall. The Chief Ministers of all states have also been invited for the launch as it is being touted as a means of fiscal transparency and freedom. The function will be an hour long and will witness the President and Prime Minister speak on this economic transition. Two short movies will also be screened in this ceremony.
Arun Jaitley, the Finance Minister, said, “When the switchover takes place, in the short term there will be some challenges,” and added that it is “not a complicated process.”
Is GST revolutionary?
Policy makers deem it as the biggest reform in Indian economic history since the Independence. The launch of GST is projected to add 2 points to the country’s GDP growth rate, along with the widening of the tax net which tacitly increases government revenues. The implementation of this unified tax stems from the objective of simplifying the tax administration, minimising tax rate slabs, preventing detrimental competition between states, and increasing compliance. However, the obvious obstacles which pave the way include training of necessary manpower for implementation, lack of clarity of mechanism, and uncertainty of the overall impact. The tax primarily subsumes all regulations levied by the state and central government, and offers one replacement for all. The GST Council has met 17 times to work on the strings of the plan. More than 65 lakh businesses have signed up to undergo this process, and will be allowed a leeway of the first two months to file returns.
Feature Image Credits: Storypick.com