The Goods and Services Tax (GST) graph is also a barometer for the nation’s overall economic well-being. It’s a reflection of the state of the market and the purchasing power of the people. When people have less money, markets shrink. In areas where there’s huge money flow, markets see hyper-activity. The good news at the start of the new fiscal is that the total gross GST collection for the last fiscal was over Rs 18 lakh crore; meaning an impressive 22 per cent year-on-year growth. This could also, or alternatively, mean the evil of tax evasion has reduced.
The new tax regime came into being in July, 2017, three years after the first Modi government took charge. There was a drag because the Opposition that had the upper hand in the Rajya Sabha – mainly the Congress and the Left as also TMC – put up a stiff resistance and attempted to scuttle it session after session without citing any special reason. Stonewalling was the name of the game and in an irresponsible manner. The government then adopted the unusual route of turning the legislation into a finance bill and got it through parliament. Finance bills need not get the nod of the upper house. The teething problems were only to be expected as the task was gargantuan; to effect uniformity in the taxation structure in markets across the country, which till then remained in a chaotic and tax-evasion was the order of the day. The ‘one nation, one tax, one market’ slogan was ambitiously conceived. GST meant a single tax on the supply of goods and services — all the way from manufacturer down to the consumer. It also ended double taxation by state and the Centre. The offer was that this would help the consumer pay less tax while it would increase the competitiveness of goods and boost exports. By the 2021-22 fiscal, the effects were majorly evident. The goods and services shipments touched an all-time high of $676 billion; and it crossed the $750 billion mark last month. India’s trade policy aims at a $2trillion exports by 2030.
With huge collections year after year, claims are that the new tax regime has matured. It still requires a lot of fine-tuning; and tax-evasions have been checked up to a substantial level. Perfection is a long process; and patience pays. It must be admitted that though the Opposition had tried its best to avoid passage of the GST legislation, it was the UPA government that took the baby steps to introduce the new market taxation system. The vision of Dr Manmohan Singh formed the bedrock of this tax reform.
