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.