The Goods and Services Tax (GST) is a big and long-term bet, altering the economic landscape. In the old system, excise collections amounted to 3 per cent of gross domestic product (GDP) or 16 per cent of gross central tax collections. Service tax generated another 2.5 per cent or 15 per cent. Excise collection of states was 2.25 per cent. The big bet is that GST will generate as much, or more, than all these taxes combined. Alcohol and petroleum products are outside GST. So, state excise will also generate significant revenues. There are many ways to hit revenue parity
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
