Canada’s Constitution explicitly(clearly,स्पस्थ्तया) mandates the free flow
of goods and services within the vast country. But its bureaucracy has devised
ways of slowing down internal trade by creating the need for licenses and
permits from every municipality and utility company. According to the Canadian
Senate’s Banking Committee, the annual losses from internal trade barriers is
approximately $99 billion. The cost of trade barriers in India could turn out
to be equally shocking.
There is a near unanimity(full
agreement,मतैक्य) on the potential of GST as a gamechanger. On the one hand the government
is encouraging enterprise through initiatives like Make in India, Start-up
India and a focus on improving “ease of doing business” and on the other hand
it is bringing in changes in labour laws, the direct tax code to replace the archaic(old,पुराना) Income Tax Act of 1961
and a new bankruptcy law to protect the interests of key stakeholders.
The current labyrinthine(complex,जटिल) tax structure is an
important reason why logistics costs in India, at around 14 per cent of the
value of goods, are among the most expensive in the world. Trucks are idle for
about 40 per cent of the time — queuing up, filling forms and paying CST and
octroi at numerous(many,बहुत
से) check-posts. A check-post free movement
can bring down the transportation time and cost by 30 per cent and 20 per cent
respectively. In practice, however, this may be wishful thinking. Since there
are a number of goods that are outside the GST — sin goods, for example —
check-posts will continue at least at state borders. Moreover, the state
transport departments will continue to have check-posts for non-tax checks like
vehicle registrations and road permits. Coordination between the transport
departments across states could be an innovative way forward. The use of
technology will be imperative(obligatory,अनिवार्य) in facilitating information flow between the states.
Smart tags and scanners could alleviate(reduce,कम) some of the pain. The
true gains of the GST will be realised only if there is a seamless movement of
goods and services amongst states.
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The GST Network is the most critical
component in ensuring successful implementation of the GST. It will facilitate
online registration, GST credits, tax payment and return filing seamlessly
amongst multiple stakeholders. “Blockchain” technology offers a historic
opportunity to develop a GSTN based on “distributed ledgers”, in a true spirit
of cooperative federalism.
The April 2017 deadline set for the rollout
of GST is going to be challenging. The GST Council has to be formed within 60
days of the Presidential assent to the bill, it has to agree and make
recommendations on modern GST laws and rates. The states have to pass their own
legislations. The endless bargaining of large versus small, consuming versus
producing states, and the ever elusive(deceptive,भ्रामक) RNR will be gigantic(huge,विशाल) stumbling blocks. The
GST council is an interesting innovation with veto powers to both the Centre
and collectively to the states. The centre has one-third and all the state
governments have two-thirds weight and decisions have to be taken with at least
three-fourths majority. So dogmatically(clearly,स्पस्थ रूप से), states can never reach
the magic figure of 75 per cent without the Centre’s help and similarly, the
Centre needs the support of at least 19 states. Interestingly, the BJP and its allies have governments in 15
states. However, the GST council only has recommendatory powers, it cannot
override the states’ right to set taxes given in the Constitution.
GST provides a chance to draft a modern law
aligned with the technological advancements of the 21st century. The tax
administration has to implement a truly modern tax law, the foundation of
which, unlike earlier ones, is laid on trust.
The PM’s clarion(loud,बिगुल) call that the GST will
end “tax terrorism” will be realised only if a “consumer first” strategy with a
strong dose of technology is made central to the implementation plan.
Otherwise, “one country, one tax, one market” could remain an unrealised dream.
courtesy:indian express
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