GST Likely to Fortify State's Coffers

GST is a value-added tax which will unify the sales tax structure throughout the country. It will replace all indirect taxes levied on goods and services by the Central and state governments.

Published: 02nd June 2014 09:52 AM  |   Last Updated: 02nd June 2014 10:03 AM   |  A+A-

KOCHI: It seems the state government as well as trade and industry bodies have given the thumbs-up to the implementation of the Goods and Services Tax (GST), citing larger benefits it may bring to the state. The cry for the realisation of this modern tax regime became louder when Kerala Finance Minister K M Mani said that the state will provide all support to the Narendra Modi Government for implementing GST. It is expected that with the introduction of GST, the revenue of the state exchequer will increase considerably.

GST is a value-added tax which will unify the sales tax structure throughout the country. It will replace all indirect taxes levied on goods and services by the Central and state governments.

“With GST in place, there will also be provision for the Kerala Government to levy additional tax. Representatives from the state Tax Department will attend the meeting convened by Union Finance Minister Arun Jaitley. The demands of the state will be presented before the Union Government at the meeting,” said K M Mani.

CII-Kerala vice-chairman Harikrishnan Nair said that when GST is implemented, it will be beneficial for the people of Kerala as well as the business sector. “The cost of goods is likely to come down with the new tax structure. Since Kerala is a consumer state, the benefit here will be greater. When the tax rates are different at different locations, chances of tax evasion are higher. With GST, there will be a uniform tax structure across the country, which will help rectify this anomaly,” he pointed out.

Chalking out a concrete plan for the introduction of GST, Kerala Chamber of Commerce and Industry (KCCI) is all set to meet the officials of the Central Government with a memorandum demanding the implementation of GST.

KCCI chairman E P George said that GST will provide equal opportunities for all. “It will also help the state government to earn more revenue,” he said.

In 2000, the Vajpayee Government at the Centre had started discussion on GST by setting up an empowered committee, headed by the then West Bengal Finance Minister Asim Dasgupta. Though much water has passed under the bridge thereafter, no concrete efforts were made towards the implementation of GST. Some states opposed the move fearing that their revenues may be hit. GST rates are typically between 16 per cent and 20 per cent globally. C J George, MD, Geojit BNP Paribas Financial Services Ltd, said that the first priority of the  Modi Government should be to implement GST. “It is estimated that the GDP of India will increase by 1.5 per cent by simply introducing GST,” he said. “Under GST, VAT and service tax rates are likely to come down. It is also expected that the price of many commodities will also come down,” said G Sanjeev Kumar, MD, Progno Financial Planning Systems.


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