1. What is the GST?
- Goods and Service Tax
- It is the biggest indirect tax reform since 1947.
- Taxes such as excise duty, service, central sales tax, VAT, entry tax or octroi will all be included by the GST under a single umbrella.
- In the words of the Indian Finance Minister Arun Jaitley, the GST bill will lead to the economic integration of India.
2. What is the main function of GST?
- The main function of the GST is to transform India into a uniform market by breaking the current fiscal barrier between states.
- Thus the GST will facilitate a uniform tax levied on goods and services across the country.
- Currently, the indirect tax system in India is complicated with overlapping taxes levied by the Centre and the State separately.
- GST is seen as a game changer for the economy. But the impact of these tax reforms, will not be immediate.
3. When will the GST be implemented?
- The ambitious goods and services tax (GST) may be a reality soon.
- Mostly it will be 17-18 percent.
- To pass GST, the government needs Parliament approval to the pending bill during the ongoing session. It is getting opposed in the Rajya Sabha.
- It will be a big sentiment booster for the markets. It has positive impact on goods and services related companies and thus progressing on Indian GDP.
- According to Indian Finance Minister Arun Jaitley, the implementation of the GST could augment India’s GDP by 2 per cent.
- Increased GDP will attract more foreign investments and which in turn would take Indian economy up and thus stock markets will make new highs.
- According to market experts, the sectors to benefit the most would be logistics, E-commerce, automobile, and FMCG among others.