About GST

For nearly thirteen years, India has been on the verge of implementing a GST. But now, with political consensus secured, the nation is on the cusp of executing one of the most ambitious and remarkable tax reforms in its independent history. Implementing a new tax, encompassing both goods and services, to be implemented by the Centre, 29 States and 2 Union Territories, in a large and complex federal system, via a constitutional amendment requiring broad political consensus, affecting potentially 4-5 million tax entities, and marshalling the latest technology to use and improve tax implementation capability, is perhaps unprecedented in modern global tax.
Model GST Law has been circulated by the Government for comments from stake holders. On going through the same we (S.K.KANODIA & ASSOCIATES) found that the same is a complex mix of the provisions of current laws sought to be unified in bits and pieces to give shape to a new structure, of course with certain refinements so that it be presented as GST.
"Besides simplifying the indirect tax structure, GST would also help to create 'One India'; by eliminating geographical fragmentation. It will remove the current cascading of taxes by ensuring the seamless flow of input credit across the value chain of both goods and services,"
Many benefits are claimed for the GST: that it will increase growth; that it will increase investment by making it easier to take advantage of input tax credits for capital goods; and that it will reduce cascading. While these are important, in our view three benefits stand out in today’s context: “Governance/institutional reform” and “Make in India by Making one India,” which are two key pillars of the government’s reform efforts. The investment, and hence growth, benefits could also be substantial. The GST will be the most significant tax reform in the fiscal history of India. It will impact prices, business processes, investments and profitability in all segments of the economy. It will also entail fundamental shift in the way tax policies are made in the country. On the whole, it is not just a tax change but a paradigm shift in the way companies do business.