A bumpy road lies ahead as Rajya Sabha nods on GST Bill

With Rajya Sabha nodding on the Goods Services Tax (GST) Bill late on Wednesday, the journey on the long and bumpy road ahead has just started to craft a unified indirect tax structure in the country. Now the ball falls in state governments' court to pass further laws to determine the scope of GST in their respective states.
 
GST Council
 
First of all, a GST Council will be established, which will play a crucial role in ensuring uniformity of the GST across states. The Council will comprise of finance minister, revenue minister and minister in charge of finance/ taxation or any other nominated minister by each state government, which will have to give final shape to the contentious design issues that are yet to be worked out.

Infosys had bagged a Rs 1,320-crore contract to build GST Network (GSTN) system last year in September, beating four other IT companies - TCS, Wipro, Tech Mahindra and Microsoft.
 
Navin Kumar, Chairman of GST Network believes the system would be ready by February.
 
Key points
 
Countries that have introduced GST in the past have often faced a relative economic slowdown before the benefits of a unified tax regime feed through.
 
India is already the world's fastest growing large economy, expanding by 7.9 per cent year-on-year in the March quarter.  A Reuters report said economists at HSBC forecast a boost of 0.8 per centage points from the GST within three to five years.
 
GST is likely to benefit sectors like FMCG, auto, cement, light electrical, multiplexes, retail and logistics. However, commercial vehicles, print media, cigarette and jewelry companies would be adversely impacted.
 
"GST holds the potential to boost economic activity substantially, improve the government's revenue, and help achieve better transmission of prices. It would enable more seamless and efficient crediting of taxes paid on capital goods, which would then become 12-14 per cent cheaper, increasing demand for them, raising investment, and hence, economic growth," said Mr Motilal Oswal,CMD,Motilal Oswal Financial Services.