Pros and cons of indian goods and services tax in economic

Abstract

The Goods and Service Tax Bill passed recently by the RajyaSabha and the LokSabha has been getting a lot of attention lately. Mainly because it is ‗The Next Big Thing‘ after the Financial Reforms of 1991 in the history of India‘s economy. We all know that the multiplicities of indirect taxes have driven up the prices of goods and services. Moreover, they make taxation complicated. Further, these taxes are different in each state and businesses end up paying tax on taxes.So basically, GST rationalizes this whole bucket of indirect taxes and attempts to unify most of them to make for a destination base tax, thereby making India a unified market. It is estimated that the GDP of the country will rise by 1 – 2 %. Let‘s have a look at the GST impact on business in the country.Consumers are expected to benefit from reduced prices of goods and services, which in turn increase consumption. Improved demand and simplified tax structure will help attract increased FDIs and FIIs and boost overall economic growth. At the same time state and Central governments are likely to benefit from a broader tax base.