GST has helped transition from ‘one nation, many taxes’ to ‘one nation, one tax,’ says Sushil Modi : 30-06-2018

One year of GST: Even as the new indirect tax regime completes one year, Bihar Deputy CM Sushil Kumar Modi says that gthe GST has helped us transition from “one nation, many taxes” to “one nation, one tax”. “It has been a wonderful lesson in co-operative federalism, one which is in the process of transforming India into a common market by bringing about economic integration in an already integrated polity,” Sushil Modi wrote in an article carried by the Indian Express. Taking stock of the progress of GST in the last one year, Sushil Modi said that before the onset of the GST, the indirect tax scene in India was fairly chaotic; it was “one nation, many taxes”.

“The pre-GST indirect tax scenario mimicked the political scenario just after Independence before the consolidation of the Indian Union by Sardar Patel. This diversity in tax practices across the country was perhaps the biggest stumbling block in the economic unification of India,” he wrote in the newspaper.

Explaining the journey of transitioning into the new regime, Modi notes that it was not without hiccups. The first big milestone was the amendment of the Constitution. The next big task was the preparation of a draft law and designing of the rules of business. Another challenging task was to create the appropriate IT infrastructure and network for integrating and bringing all the states on to a common platform and creating probably the biggest tax administration system in the world, he said.

“Inevitably, teething troubles began to emerge just one month into the introduction of the GST. The unifying features of the GST system and the unique features of the Indian GST led to some initial hiccups and difficulties in the implementation of, and compliance with, the new system in India. The GST Council rose to the occasion, met frequently and for long hours, to resolve the issues,” he recalled.

Sushil Modi also noted that merely bringing petroleum into GST will not ease the price burden. “If petro products are brought into GST, then there will be minor impact on the incidence of tax… and minor impact on prices. The price of petrol, diesel will continue to be driven by global factors,” Modi said. He said 45-50 per cent of tax revenues of states come from petrol and diesel.

Source : Financial Express

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