GST will make India’s goods and services competitive: FM
22 May 2012
The goods and services tax (GST), when introduced, would remove the cascading effect of taxes which acts like a hidden cost and makes India's goods and services uncompetitive, both in the domestic and international markets, finance minister Pranab Mukherjee has said.
At the same time, Mukherjee said, GST would check leakage of revenue, thereby helping states to realise tax revenues commensurate with consumption of goods and services within their territory. ''This would provide a stable source of tax revenue for states and help sew India together into one common market,'' he said.
For the consumer, one biggest advantage would be its transparent character as well as the reduction in the overall tax burden on goods, which is currently in the range of about 25-30 per cent, he said.
Mukherjee was addressing the second meeting of the consultative committee attached to the ministry of finance on `GST- The Way Forward', in New Delhi on Monday.
He said there are several factors that make the current situation conducive to the introduction of GST in India, adding that studies have shown that the introduction of GST would act like a stimulus and instantly spur the rate of growth of the economy.
It is estimated that the introduction of GST would lead to a 1 per cent to 1.5 per cent increase in GDP growth of the country.
