How Beneficial Next Gen GST Will Be For Common Man?

By SANTOSH MOHANTY

The Next Gen GST or GST 2.0 has become effective with the sole intention of providing relief to the common man of the country. The reforms in tax slabs have been carried out after long eight years. During these eight years, Indian citizens, particularly the common man, virtually paid through their noses for goods and services. The Opposition leaders of the country have been demanding the scrapping of GST terming it as Gabbar Singh Tax as prices of essential commodities skyrocketed due to implementation of different slabs such as 5, 12,18 and 28 percent.

Prime Minister Narendra Modi has finally bowed down to the pressure of the Opposition leaders particualary that of Rahul Gandhi of Congress party to carry out reforms for the benefit of poor people of India. PM Modi in his address to the nation has described the reforms as 'Bachat Ka Ustsab' or a celebration for savings. But, only time will tell how the savings of the poor people are protected with the implementation of the Next Gen GST.

What Is GST?

It stands for Goods and Services Tax and was introduced in the country by the Modi Governemnt in 2017. At that time it was widely broadcast, telecast and written that the government had introduced the measure as part of one nation one tax system. But, over the years, the GST turned out to be very complicated for small time businessmen and traders in the country due to multipliticity in slabs. The government imposed taxes on essential food items rising their prices enormously. It was widely believed that the Modi Government was in favour of corporate friends and the GST was implemented in the country with the sole purpose of protecting their interest.   

What Is Next Gen Reforms?

The Central government has declared that the reformes will provide relief to consumers, particulary those who are coming under lower income and middle class. It said a number of items such as food, milk and paneer, household essentials, health-care goods, and education-related items will now become cheaper.  The reduction in tax system will also benefit agriculture and rural sectors in the country, the government said.

According to the government, GST reduction on different goods will encourage more people to purchase more and this will increase demand leading to growth of the economy. The Finance Minister has said the rate cuts will inject about Rs 2 lakh crore into the economy.

Revenue Loss To Govt:

Both the Centre and state governments will incur losses due to rate cuts which is roughly estimated to be nearly Rs 50,000 crore annually. Economists said that there is likelihood is that the rate cuts will affect the structures upstream. They said transition from one slab to another involves issues that will affect the  traders, retailers as well as manufacturers for updating systems acquired under older rates. Swift actions are needed to resolve the disputes leading to rate cuts of goods and services.

Everybody knows that the Modi Government has announced the rate cuts of essential goods and services keeping an eye on Bihar election in two months and subsequent polls later in other states. This move might be populist, but everything depends on how the measures are implemented to benefit the poor.

Conclusion

Finally the corrections to the GST has been made and this is an welcome move by the Modi Government at the Centre. The tax system has been simplified to provide relief to the citizens, mostly the common man.

Despite the reforms, the government has to ensure the implementation of the Next Gen system has to benefit across society, particularly the marginalized sections of the society. The reformative measures have to be carried out well, with good intent and put into good practice.