GST Agenda for the Second year

The establishment of the Goods and Services Tax in a democracy like India has without a doubt been one of the most groundbreaking initiatives made by the Indian Government. In the history of India, a uniform, indirect tax reform that functions under the federal structure has been instituted for the very first time. Even though it had minor compliance issues in the beginning, GST in today's date has become highly popular amongst the masses.

Even though the list of issues (pertaining to GST) remaining to be addressed is still quite exhaustive, the major problems resolved under GST in the first year itself has instilled immense confidence and hope in Indian citizens. Following are some of the occurrences that GST brought about with its uniform tax structure:

1. Inflation rate did not take a hike: Where GST was once feared to be one of the contributing factors towards a rise in inflation, it turned out that factors such as high fuel and food prices contributed to the hike. On the other hand, the multi slab structure of the tax regime is what caused the inflation rate to remain stable. The slab structure essentially ensured that the applied levy remained in close proximity to the existing rate, thereby stabilizing the tax incidence. Another contributing constituent was the anti-profiteering law. The body governing anti-profiteering laws, in fact, was instituted after the rollout of GST; however the very idea of its inception prevented multiple entities and companies from abusing the transition.
2. Emergence of a single federal market: A flawless federal market soon emerged after the rollout of GST as long queues of goods vehicles (and trucks) started disappearing and checkpoints started getting dismantled. The existing roadblocks had earlier caused the movement of goods to restrict itself which ultimately led to long hours of delay and skyrocketing transaction costs. This, in turn, placed immense pressure on the logistics sector as the end consumer ultimately was required to pay the increased cost.
3. Emergence of the era 'one nation, one tax': A customer residing in South India is currently paying the same amount of money for an item as a customer residing in the northern part of India. The Goods and Services Tax (GST) has also led businesses to streamline their operations and distribution systems - supply, production, storage, and so on. These elements were earlier formulated keeping in consideration the state taxes. GST has made the entire system smooth and absolutely flawless.