Post GST reform, India has various economic opportunities but too many challenges remain to be addressed
8 months ago SANJEET DWIVEDI 0
India is going through its economic transition phase post demonetization of the Indian rupee. This transition will face further difficulties and challenges as it is trying to integrate with world market by offering a single national market through a destination based Good and Services Tax(GST) reform.
The Indian concept of Good and Services Tax(GST ) has more challenges in its ambit as in every stage of production and supply chain of good and services, the tax will be credited to input while it will be imposed on output only. This has to to be done for every good and service to be offered in India.
There are also multiple tax rates/slabs for different good and services, it will make the process of destination based taxing and crediting with input tax as Hercules’s task.
The structure is also very dual in nature. Both the central government and the states’ government shall be enforcing authority. It will create challenges and difficulty in the very transition phase.
How will GST impact business entities?
GST may impact the profitability of business entities as they will face the dual impact of GST. For some good and services, they will have less tax burden, while in the case of other, they will have more tax burden.
For reducing this tax burden, they have to either shift tax burden or they have to reduce prices of good and services.
What are the remaining challenges to be addressed for making the economic transition as a path for India’s robust economic growth?
These are the following remaining challenges to be addressed for making the economic transition as a path for India’s robust economic growth –
- labour reform,
- land reform, and appropriate land acquisition laws,
- easy of doing foreign direct investment in India,
- agricultural reform,
- development of coastal economic zones, and
- lowering of the gestation period for a new project