decade, India needs to bring about a massive overhaulingof existingtax regime.Present regime is marked by plethora of taxes collected both by States and the Centre. This system of taxation iscumbersome, complicated and taxing as well as unfriendly to honest tax payers. Sometimes, the amounts spent oncollection of taxes are more than that of collected tax itself. Across states it is also, many a times, non-rational,impractical and unscientific. It is in this backdrop, Vijay Kelkar, chairman of 13
Finance commission was giventhe job of making it rational and modern in tune withdeveloped nations. The Proposed GST is being finalized by Empowered Committee of State Finance Ministers(ECSFM). If all goes well, this new system would subsumethe older one. It is estimated that introduction of GST reform will add 500 billion Dollars; half the GDP of India, tostate’s coffer adding 1.4% to the GDP. If it proves true, it is going to bring about a silent revolution in the history of economic development of India.The present pattern of contribution of different sectors tothe GDP in terms of percentage is vastly different fromwhat it was in pre 1990s. for instance, the Service sector’scontribution has swelled up to 50% and that of manufacturing sector stands at about 25%, whereas ; thecontribution of agriculture has been drastically reduced to24-25% in the GDP. This changing pattern is suggestive of the fact that we ought to evolve a new and modern but unified tax regime which should be in commensurate withthe changing times. It is in this perspective the tax regime is urgently required to be overhauled, simplified and unified.
HOW WILL THE GST HELP IN SPUR IN GROWTH ANDINCREASE THE VOLUME OF COLLECTION.