Essay Example on GST will not raise growth will push up consumer prices Inflation

GST will not raise growth will push up consumer prices inflation and may not result in increased tax revenue collections There appears to be certain loopholes in the proposed GST tax regime which may be detrimental in delivering the desired results They are India has adopted dual GST instead of national GST It has made the entire structure of GST fairly convoluted in India The centre will have to coordinate with 29 states and 7 union territories to implement such tax rule Such regime is likely to create economic as well as political issues The states are likely to lose the say in causal rates once GST is implemented The sharing of revenues between the states and the centre is still a matter of contention with no unanimity arrived regarding income neutral rate Chief Economic Advisor Arvind Subramanian on 4 December 2015 suggested GST rates of 12 for concessional goods 17 18 for standard goods and 40 for luxury goods which is much higher than the present maximum service tax rate of 14 Such initiative is likely to push inflation The future GST construction is likely to succeed only if the country has a strong IT network It is a well known fact that India is still in the budding state as far as internet connectivity is concerned Moreover the proposed regime seems to ignore the developing sector of e commerce E commerce does not leave signs of the business outside the internet and has anonymity associated with it As a result it becomes almost impossible to track the business transaction taking place done internet which can be business to business business to client or customer to consumer 

The administration of India should study the GST regime set up by various countries and also their fallouts before implementing it At the same time the government should make an attempt to insulate the vast poor population of India against the likely inflation due to operation of GST No doubt GST will simplify existing subsidiary tax system and will help to remove inefficiencies created by the existing current heterogeneous taxation system only if there is a clear consensus over issues of threshold limit revenue rate and inclusion of petroleum products power liquor and real property Until the agreement is reached the government should resist from implementing such regime