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August 04, 2016

India's GST, Though Complex, is a Potential Game-Changer

Vivek Dehejia, Resident Senior Fellow, IDFC Institute is qouted in Soutik Biswas's BBC News article on the complex nature of India's new Goods and Services Tax (GST) reform. 

 

Biswas proposes that this is

"the most significant tax reform since independence for what is now Asia's third largest economy. The GST subsumes India's messy plethora of indirect taxes, duties, surcharges and cesses into a single tax...

The GST is also a potential game-changer as the burden of taxation moves from the state of manufacture to the state of consumption of goods and services...

A steep tax could easily make some goods and services expensive ... and stoke inflation. Differences could easily flare up between the centre and the states over tax-sharing arrangements."

 

However, Dehejia allays such fears over the tough journey ahead: 

"The perfect ought not become the enemy of the good, especially as a less-than-perfect GST which can be improved down the road will be better than our current patchwork quilt of taxes, which prevents India from being stitched into a single market."

 

Read the full article here.

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