The country witnessed a momentous occasion after the Rajya Sabha today passed the historic Goods and Services Tax Constitutional Amendment Bill. The tax, upon rollout, will replace almost all state and central indirect taxes and levies such as excise, service tax, sales tax, VAT and octroi.
The most vocal proponent of the bill, Adi Godrej, believes the tax’s rollout will add at least 1.5-2 percent to the country’s growth rate. GST’s benefits are many: it will widen the tax base by easing compliances, boost ease of doing business, reduce the overall tax rate in the economy and thus help investment and boost growth. Being value-added in nature, it will also eliminate the economically-negative practice of levying tax on tax. Further, by doing away by differential tax structures in various states, GST will for the first time create a national market and boost inter-state trade. “The biggest positives from the GST is that it will lower the tax rate and make tax evasion very difficult,” Godrej said.