Single or Ideal GST Vs. Dual GST  –  “Look Beyond the Obvious” 

After the change in Political Scenario of this great country having deep roots of democracy, why not the people of India get a ‘unified-single GST’ which is the ‘ideal GST’ rather than compromising for the ‘dual GST alongwith IGST’ which the erstwhile Government was propagating ? Unfortunately the present Union Government is also taking further the same Dual GST rather than the Single GST. This pragmatic approach is certainly not the best decision of the Union Government. 

People of India have given a majority mandate with the concept that Government in power must take radical decisions in the best national interest without any rider or limitations. People of India have high expectation for improved/stable economic situation which will be largely and positively influenced by the ‘unified-single GST’. 

Raising stature of India in the Global Economy compels us to adopt the best tax system to grow and maintain competitive advantage. There is no doubt that introduction and implementation of ‘unified-single GST’ administered by one single Agency is the ‘ideal GST’ which will have major positive impact on all enterprises and stake holders in India. The following key benefits of GST can only be achieved with ‘unified-single GST’ : 

  1. Removal of Cascading Effect of Taxation. 
  1. Abolition of Multiple Tax Laws. 
  1. Reduction in Cost of Payment and Collection of Tax.  
  1. Clarity and Homogenity in Taxing System. 
  1. Reduced cost of Production/Export of goods and services by    increasing efficiency. 
  1.  Faster Assessment and Reduced Litigation. 
  1.  Consumption based internationally accepted taxation. 
  1.  Removal of Distortions and Simplification of the tax system. 

Presently, the Constitution of India enshrines financial independence to every state and thus the power to collect Indirect Tax on sale of goods have been provided to the States. As time is unnecessary passing on flimsy political issues between the political parties ignoring the real economic interest of the country than why not further time be taken on a new Constitutional Amendment Bill with the new philosophy which may be drafted, framed and presented before the Lok Sabha. The presently ruling party in Centre will also get the absolute majority very soon in Rajya Sabha also which will remove any hurdle in introducing an entirely new system of Single or Unified GST. The new Chairman of the Empowered Committee of Finance Ministers for GST can re-address GST on an entirely new platform for adoption and implementation of Single-GST. Why not we achieve the best even if we have to start afresh and have to work harder to adhere in the same time frame. 

The adoption and implementation of new system of collection of Indirect Tax by introduction of ‘unified-single GST’ should be considered with a new thought and energy rather than adopting a compromised formula of the previous Congress Government which was working with a fractured mandate. We must think with an absolutely open mind in the changed atmosphere for adopting and implementing ‘ideal GST’ in the best national interest. The innovative revenue sharing mechanism can be worked out between the centre and the states in the larger economic interest of the country. If we start working with this new philosophy we can certainly find ways to adopt ‘ideal GST’ with the motto of the political ideology of the party in power i.e. “we can and we will do”. 

We can expect the major gain of GST (including the increase by 1.5 to 2 percentage points in GDP) in our country only if we implement ‘ideal GST’.  

‘Dual GST model alongwith IGST’ will not provide similar or equivalent benefits to the Indian economy, so why not, we strive for the best i.e. the unified-single GST or ideal GST.