Given the federal structure of our country, we were compelled to introduce a dual GST where the central and state governments have equal right to levy GST on supply of taxable goods and/or services on intra-state transactions.
In the recently announced Budget 2019-20 papers, lies buried a data point on the India GST. In a span of two years from its introduction, the initial euphoria and charm has faded away completely, and the GST numbers have been reduced to reflect a decrease in the expected collections. Yes, rates of many items were slashed and there were many course corrections made all along. The government needs to be commended for being flexible and agile on that count. However, there are symptoms which require urgent repairs. Falling GST collections is a matter of great concern for the economy, given that the GST is a consumption tax, and other things being equal, less tax means less consumption, which means lower growth of the economy.
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It has been time and again noted that the GST , though simple as compared to the erstwhile indirect taxes regime, is still complex. Given the federal structure of our country, we were compelled to introduce a dual GST where the central and state governments have equal right to levy GST on supply of taxable goods and/or services on intra-state transactions. On the inter-state transactions and transactions involving imports, an IGST is levied by the central government, proceeds of which are equally shared between the Centre and the states.
Source: Financial Express
