Capping tax rate in GST
The passage of the Goods and Services Tax (GST) Bill is a watershed moment in the economic history of India. That the ruling dispensation and the Opposition displayed a politics of bipartisanship towards the passage of the Bill, keeping their narrow political interests at bay, is heartening. The Union Government may have set April 2017 as the deadline to roll out the GST across the country, but given the hurdles, it seems like it may take much longer.
While the GST offers many advantages to the economy and to the people – jobs, high economic growth, higher tax collection with less tax evasion, and ease of doing business, but it is an indirect tax, which by nature is regressive and affects the poor, perpetuating income inequality, if tax rate is not capped. Therefore, the demand for capping the GST tax rate at 18 per cent merits consideration. The GST cannot be an achievement in isolation. The increased revenue thereof must serve the welfare of the common man.