2017 will go down as one of the most significant years in the history of India with Goods and Services Tax becoming a reality from July 1, 2017. The new system is being regarded as the most revolutionising tax reform in the Indian taxation history. Sound tax policies of a nation are an indication of strong governance and sustainable development. This fact is reflected from the historical perspective also. All the successful rulers known for being good administrators had also put in place an excellent revenue collection system - be it the Mauryas, Guptas, Iltutmish or Akbar.
Tax apart from being a source of revenue and growth, also plays a key role in making the state accountable to its taxpayers. Effective taxation ensures that public finances are sustainable in the longer term to support social objectives and promote economic development.
The new regime aims to transform the tax scenario of the country by streamlining the system through a single tax for supply of all goods and services across the country. Heralded as a 'destination tax', the GST is a tax on goods and services which will be paid at the point of receiving. For example, tax on cloth will be paid where the cloth is sold.
GST, because of its transparent character, will also be easier to administer. This will give a fillip to ‘Make in India’ as well as ease of doing business. With India expected to play significant role in the world economy, GST will also prove to be a game changer as it will make Indian products competitive in the domestic as well as the international markets leading to an overall increase in exports.
Once implemented, this unparalleled tax reform holds great promise in terms of sustainable growth for the Indian economy. It will help in creating a uniform national market making the dream of “One Nation, One Tax, One Market” a reality.