'GST will reduce commodity prices'

FM: New regime will curb tax evasion

Finance Minister Arun Jaitley on Wednesday said the Goods and Services Tax (GST), which is likely to be rolled out from July 1, will help curb tax evasion and reduce prices of various commodities by reducing tax on tax.

“GST will be a game changer and will help in curbing tax evasion, bringing transparency and efficiency in tax administration, reducing the prices of various items by avoiding tax on tax and ensuring seamless transfer of goods from one region to another, among others,” Jaitley said, addressing the 23rd Conference of Auditors’ General of Commonwealth Countries and British Overseas Territories in Delhi.

Jaitley said that GST will simplify the most complicated indirect tax system in the country by subsuming various Central and State indirect taxes and introducing the concept of ‘One Nation, One Tax’.He said the new indirect tax regime will ensure seamless transfer of goods and services, while stronger information technology backbone will make evasion difficult. The Union Cabinet cleared four supplementary GST legislations enabling its introduction in Parliament.

“The laws which enable this (GST) are now before Parliament, which hopefully should get cleared, and once they do get cleared, then by the middle of this year, we hope to see the implementation as far as this law is concerned,” Jaitley said.

On FDI, he said India was the most preferred destination in the world, as it had opened its economy for FDI in various sectors especially in the last two-three years.
The finance minister also touched upon the issue of demonetisation stating that by withdrawing the legal tender character of Rs 500 and Rs 1,000 notes, the anonymity attached with the cash is over, and the informal sector has to a large extent integrated with the formal sector, and thereby, making the Indian economy more cleaner, transparent and efficient.

He said that cash was incentivising crime, corruption, tax evasion and black money, among others.

Jaitley said that demonetising on the one hand helped in tackling all these problems, while on the other hand, led to increased digitisation of transactions and reducing the overall impact of shadow economy among others.

One Nation, OneTax

GST will simplify the most complicated indirect tax system
New indirect tax regime will ensure seamless transfer of goods and services
Note ban has led to increased digitisation of transactions and reducing the overall impact of shadow economy