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Is GST really a One nation, One tax system?

GST is considered the biggest indirect tax reform of Independent India. Being projected as “one nation,
one tax,” GST has created optimism for businesses. The main objective of this Goods and Services Tax
is to replace multiple taxes with a uniform tax on supply chain of goods and services. The aim is to
remove the cascading impact of tax on tax and create a national market for goods and services. The
framework of the GST, however, appears to be drifting away from this. Let's see if the GST is indeed “one
nation, one tax.”


1. Multiple tax slabs

We have ended up with 31 GST legislations, 29 VAT legislations and a union legislation on Central
Excise instead of one single tax for the entire nation. The Constitution has concurrently empowered
centre and states to levy GST on goods and services supply within the state. There is a CGST and
around 29 state laws on GST as each state has its own SGST. The Centre has further been empowered
to levy the tax on supply of goods and services during trade between entire sates or commerce (IGST).
The net result? A whopping 31 legislations of GST, each different from the other namely CGST, IGST and

Value Added Tax and Central Excise Duty on specified products like petrol, diesel, aviation fuel and
alcohol continue. Apart from these indirect taxes, tobacco and tobacco products have been subjected to
central excise duty tax besides GST.

2. Too Many Tax Rates

Most of the countries with GST have a single tax rate. Some have two. But India has four different tax
rates for GST. Service tax which earlier had one rate is now divided into 4.

3. Tough to Comply

Number of returns to be filed under GST will rise enormously as a result of this. Small businesses with
poor power supply and low internet connectivity will either struggle to file their returns or go out of

4. Scope for Evading

Many businesses are eyeing the scope for evasion. According to the law, businesses with less than INR
20 lakhs yearly turnover can be exempt from GST. Small shell companies may grow to evade the tax
system as a result.

5. Inadequate Coverage

Close to one-third of products and services are not under GST. This includes petrol and liquor industry
and parts of realty. This will create a major issue for companies that take services or products from those
outside the GST ambit, for example, restaurants looking to purchase alcohol for their menu.

6. No Limitations on GST Laws

Article 246A empowers the Parliament and state legislatures to make laws for GST. It places no
limitations on laws on GST. So, n number of permutations and combinations are possible. Nothing in the
constitution prevents the centre and state from enacting CGST and SGST in ways that deviate from the
GST Council. GST Council can only make recommendations, not binding statutory laws. If the regulatory
body does not have the power to make changes for the benefit of uniformity, what good is GST?


1. Hurts none, benefits everyone

The introduction of the GST is transformative as it benefits everyone and hurts none. Lower prices of
most products and services benefit the consumer. This is because post tax rate on most products and
services is lower than pre GST.

2. Ensures Tax Compliance Across the Nation

Businesses will benefit because there will be easier tax compliance on account of lower tax rate and
simpler interstate movement.

3. Digital GST For Uniformity across states

As GST online is digital and online, taxes need to be subsumed across the state, varying far less. More
tax papers means more revenue and easier administration across states.

4. Digital Trail

As there will be less evasion, and more taxpayers, there will be a broad digital trail of taxes and
businesses. More investments, more jobs, and higher growth will result. Tax ushered in will boost the
economy through one tax for one nation.

The biggest problem is that the GST introduced is far from ideal. A lot of compromise has been the
consequence of letting states have the power to make changes. There are closer to 6 different rates
rather than 1 or 2 at latest count. States have been given power to levy taxes on services, but allocation
of taxation limits and jurisdiction remains a critical issue. Businesses are concerned about assessment
hurdles in getting input credit and compliance. No other country has implemented GST where 60% tax is
in services, less than 20 percent in manufacturing and agriculture which is untaxed. Are the states trained
to handle the disparities? While sincere attempts have been made to resolve issues, it remains to be
seen if this philosophy of any GST is better than no GST will be successful. Forming the cornerstone of
cooperative federalism, a single GST would have been glorious. But just how bright can India's future be,
with “one nation, one tax” reforms that are questionable? A lot depends on the economy, and resolution
of compliance issues with respect to this.
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 RE: Is GST really a One nation, One tax system? -Mayank (11/06/17)
 Hi everyone....I would like to say that GST is a one nation,one tax system.... because before that.....we have many
taxes like service tax,service charge,food charge,and other types of taxes....and people didn't know ho all these taxes
are applicable.....but now When GST is introduced it is easy for the people to understand what amount and why they
are paying this tax...and it is also very easy to understand because there are 4 types according to the different types
of products
 RE: Is GST really a One nation, One tax system? -Group discussion (07/17/17)
 I have had this topic for discussion in one of my interview recently.

Here are few benefits that GST offers:

It eliminates multiple taxes, thus taxes will be lower. Manufacturers will be benefited.
Lower tax will reduce tax evasion, thus govt. revenue will increase
Paying single tax is easier than paying multiple taxes, thus tax structure will be simplified
Single tax system is more simplified and will attract more foriegn investor
 RE: Is GST really a One nation, One tax system? -GST (07/17/17)
 This is a very common topic of discussion nowadays. It is well written and has been compiled briefly. Those who are
up for group discussion will be surely benefited.