Should single-point GST be implemented?

Should single-point GST be implemented?

Indian government wants to focus on three important areas. They are DFC, Aadhaar and GST. Here, we are going to have a debate on the last factor that is the Goods and Service Tax. If it is implemented in India, it will be one of the biggest and significant tax reforms in India. Centre government will soon seek consensus with the states on the matter of implementing single-point GST. The bill will be presented in Parliament in winter session. What is your view on the matter? Should GST be implemented in India?

Yes

• A single-point GST is the only way that can integrate the different state economies and bring them on same platform to boost overall growth.

• India has got multiple layers of taxation making it really tough for the government to handle them in an effective way.

• It will be a great relief for the state government as well as the centre government as it will divide the tax burden in a well balanced way between manufacturing and services.

• If GST is implemented then all the taxes will be charged on the manufacturing costs that will ultimately help the people to get the products at lower prices.

• India needs a transparent tax administration that is free of the corrupt and unethical practices. GST will be the first step towards achieving the objective.

No

• If India wants to implement GST just to create a transparent tax system, then again the efforts will go in vain as businesses will conveniently find a mid-way to dodge taxes.

• GST system is successful in Singapore and Germany but then they are the regions run by a single party whereas India has got a unitary setup.

• India’s asymmetric federalism is comparable only with the United States of America and even it doesn’t support the idea of GST.

• The administrative mechanism of India will destroy the benefits of GST. It failed to handle the merger of Indian Airlines and Air India effectively then how do you expect to handle the integration of different tax services of more than 20 odd states.


• Instead of becoming an effective tool of rationalization of the government, GST will become a tool of convenience for the businesses.

• Centre government will have to pay a huge amount to the states governments to compensate the CST loss till the time GST is effectively implemented. It will be a huge loss to the economy.

Conclusion

The answer to this debate is simple. If the thing is not broken then there is no need to fix it. In a country like India, where federal structure is really complex, it is wise to change the tax system to a limited extent. But asking for a single point GST is beyond the scope of India. Unified market works well in the regions where there is no diversity. In India, it is a completely different game. So, instead of wasting the time, money and efforts on discussing GST, the government should rather focus on rationalizing the existing tax system. It will pay off in the long run.