New Delhi – The Indian Union and the State Governments on Tuesday have agreed to make headway on the long-awaited reforms of Goods and Service Tax (GST).
The government is doing everything in its power to make the reform a reality and have already agreed that the tax rate will be lower than the current level.
The government this time through the GST bill seeks to create a national market and by doing it replace all form of state-level tax and central tax from the economy.
The bill which was supposed to be passed on April 1 intends to convert the market of 29 states into a single market. But due to the opposition in the Rajya Sabha, the deadline was missed again.
The government everything in its power to get the GST bill approved during the current monsoon season of parliament which will come to end on August 12, 2016.
But is facing opposition from Congress as the party members are demanding to cap tax rates in the Constitution. On this matter, the government also had a closed door meeting with some prominent member of the party on Tuesday but for now, have not reached any conclusive decision.
Once the bill gets the approval from both the houses, then it will have to ratify by 50% of the 29 state assemblies. For the bill to come into action by April 2017, it will have to approve in this monsoon season. Otherwise, it may face the risk of being delayed even further in the coming time.
Keeping this risk into consideration, the business advisory committee has decided to discuss the bill by this week. The passing of this bill is not only crucial for our economy, but investor around the world are keeping a close watch on this bill.
They would see changes in the transportation of a good many of the charges that are implemented from one state to another will get reduced. The market will gain 5 to 7 % in near future and will only grow with time.
The second point raised by an economist is that if the bill gets passed, it will bring change on how business and commerce is done in India. It will not only restore the purchasing power in the hands of the consumer but will flood the Indian market with domestic and foreign funds.
Through this bill, all the indirect taxes such as excise duty, service tax, value added tax will be absorbed in the much-awaited goods and service tax (GST). It is being said that once GST comes into implementation, it will benefit the logistic operators, FMCG, media, and manufacturers.