Goods and Services Tax: According to Union Finance Minister Nirmala Sitharaman, the Goods and Services Tax (GST) has significantly strengthened the revenue buoyancy of states. She stated that the all-around benefit of GST is remarkable and stands out.
Before the implementation of GST, the multiplicity of taxes resulted in a “tax-on-tax” effect. This led to the same product being taxed multiple times, making it more expensive for consumers. Sitharaman made these remarks during the GST Day 2023 event.
Comparing the tax rates before and after GST, Sitharaman emphasized that GST has been beneficial for consumers by reducing the tax rates compared to the previous regime.
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‘India’s indirect tax system was fragmented before GST’
Sitharaman highlighted that India’s indirect tax system was fragmented prior to the implementation of GST. Each state operated as a distinct market for both the industry and the consumer.
“GST stands out as an exemplar in terms of benefiting the common consumer, ensuring tax buoyancy, and simplifying the process by making it digital,” said Sitharaman.
Before GST, the state revenue buoyancy was 0.72, which increased to 1.22 after GST was introduced. Sitharaman added, “GST has significantly improved buoyancy, benefiting both the central and state governments. Today, no state suffers from a revenue decline post-GST.”
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
