Stressing that India has been able to implement the major indirect tax reform GST in the least disruptive manner, Union Minister Arun Jaitley on Sunday said best of the new regime in terms of contribution to the society was yet to come.
The government rolled the Goods and Services Tax (GST), which encompasses 17 indirect taxes and a host of cesses, on intervening midnight of June 30 and July 1 last year.
Observing that countries implementing GST had witnessed major disruption, Jaitley said he too had felt that it would cause disruption in the Indian economy.ALSO READ: PM nixes single rate under GST; says Mercedes, milk cannot have same tax
I myself used to use the word disruptive when it came to major reform like GST because it takes time to settle down. But after one year of experience I'm not too sure whether I can use the word disruptive for GST reform," said Jaitley while addressing a function to mark completion of one year of the new tax reform through video conferencing.
It has been one year since the country’s switchover to a new indirect taxation system - the Good and Services Tax. One single tax replaced seventeen taxes and multiple cesses imposed by the Central and the State Governments. #GSTForNewIndia— Arun Jaitley (@arunjaitley) July 1, 2018
The smooth manner in which the changeover has taken place is almost unprecedented anywhere in the world ... I'm sure we have seen the first year where we have seen effective gains this is only the short-term or at best medium term of GST that the best of GST in terms of its contribution to society is yet to come.ALSO READ: GST collections rise to Rs 956 bn in June, to reach 1 trn: Hasmukh Adhia
The GST, the minister said, would have a long-term impact on the country's GDP growth, ease of doing business, expansion of trade and industry, make in India initiative, besides promoting honest business practices.
As the tax collection goes up, the capacity to rationalise the slabs, the capacity to rationalise the rates, also will certainly increase. And therefore that capacity to rationalise will increase once the total volume of tax collected significantly increases, Jaitley said.
The seamless flow of goods and services across the country has made ‘Doing of Business’ simpler.
The GST is expanding the tax base of the less developed consuming states significantly, which will provide more resources for them to devote for development purposes.ALSO READ: GST turns one: Leaving the birth pangs behind, it learns how to walk — Arun Jaitley (@arunjaitley) July 1, 2018
Stating that the input tax credit itself is an effective route for ensuring that people make their disclosures more faster, Jaitley said once you have a more efficient tax system it will ensure that evasion does not take place.
The UPA kept petroleum products permanently outside GST. On the contrary, we brought them back into the Constitution as levyable to GST and can gradually impose the GST when the GST Council so decides. For this I would continue to make my earnest efforts with the States.— Arun Jaitley (@arunjaitley) July 1, 2018
The e-way bill has already been implemented and once the invoice matching comes in, evasion and detection of evasion itself will become far simpler itself, he said.
Key future actions in GST will include further simplifying and rationalizing the rate structure and bringing more products into the GST. I am confident that once revenue stabilizes and the GST settles, the GST Council will look into these carefully and act judiciously.— Arun Jaitley (@arunjaitley) July 1, 2018