The Finance Minister Nirmala Sitharaman remembers the legacy of former finance minister Arun Jaitley who gave the phenomenal Goods and Services Tax on his death anniversary. The best tribute can only be in the form of remembering and recounting the benefits of this single tax system.
On August 24, 2019, our former finance minister Arun Jaitley passed away who heralded the GST and the introduction of this single tax reform was mostly awaited by Indian economy over a decade. From July 1, 2017, the whole country became one market, double taxation was eliminated, the cascading effect of taxes got eased, multiple taxes subsumed into one, the interstate restrictions disappeared.
GST ensured that there won’t be any state barriers and long queues of trucks, where it subsumed 17 various taxes and 13 cesses into one. The norm was a high tax burden on consumers. In the initial two years, the collections got improved, the GST Council in each of their meetings reduced the tax burden on consumers. While at introduction, the items had 31 per cent tax or more tax slab and later on was brought down to 28 per cent rate. Many items then brought down to 18 per cent, 12 per cent and 5 per cent category. Cinema tickets are one example which had a high tax rate of 35 per cent to 110 per cent which is now available at 12 or 18 per cent only. The restaurant chains, construction sector for residential purposes are at 5 per cent slab and affordable housing rate is just 1 per cent.
In the opinion of Nirmala Sitharaman, the government is successful to create a nation with one market and one tax system. The centre and state together have strived to achieve the goals and pooled their fiscal rights in a good federal body – The council. The success does not come without any challenges but issues like technical support and revenue generation where the immediate concerns faced. The spirit evolved from collective responsibility, mutual trust and confidence were very high. All these aspects will make Arun Jaitely remembered for making India a single market. He defined the council as the “first experiment with the federal institution”. He believed that it is highly important for the council to behave with the utmost accountability and honesty. The council altogether had 40 meetings till the date and the 41st will be held on August 27, 2020. The tax reform was to boost each and every industry and special considerations were given to different sectors according to their needs.
