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‘One nation, one tax, one rate’ will be the new Identity of India. Goods and Service tax (GST) in India is hyped as the single largest tax reform since independence. It I estimated to boost GDP by 1.5 to 2%. The benefits of simplified compliance, technological backing and uniform process all over will contribute significantly the 'Ease of doing Business' while also bringing-in tax compliance and transparency. The current taxation system in effect is very complex with more than ten repetitive indirect taxes. In this taxation system neither manufacturers, nor ultimate consumers are benefitted. All the gains are pocketed by middle man.
The arrival of GST would be a significant step in the field of indirect tax reform in India. By combining the large number of Central and State Taxes into a single tax and allowing set-off of prior-stage taxes, it would mitigate the ill effects of cascading. It will pave the way for a common national market. For the consumers, the biggest gain would be in terms of reduction in the overall tax burden on goods, which is currently estimated at 25%-30%. Introduction of GST would also make products competitive in the domestic and international markets. The chances are that it would instantly spur economic growth. There may also be revenue gain for the Centre and the States due to widening of tax base, increase in trade volumes and improved tax compliance. Last but not the least, this tax, because of its transparent character, would be easier to administer.