The Goods and Services Tax seems all set for its July 1 rollout, with finance minister Arun Jaitley confident of keeping this launch date despite doubts by the lone dissenter, West Bengal’s chief minister, who sought more time. GST, hailed as the biggest reform since the economy was liberalised, will subsume most indirect taxes, creating a more transparent system. It’s hoped it will reduce the chances of corruption, rampant under the old system. It was hoped GST would reduce the 28 per tax on bidis, the poor man’s smoke, but it instead taxed it at the highest 28 per cent, from the present five per cent, in the name of protecting the health of smokers. While this is debatable, the GST Council must be commended for the thought it put into finalising GST. For instance, it lowered the tax on solar panels to five per cent, from the existing 12 per cent, to give alternative energy a boost.
The steep drop in GST on processed foods will give relief to working women as they rush to work after doing their household chores. There will always be some sections left unhappy, as in the case of the diamond industry, which is peeved that diamond roughs have been taxed at a nominal 0.25 per cent. Mr Jaitley had a point when he said it was imposed to keep track of items. It’s well known that the diamond trade is one of the largest sources of unaccounted money, so this is one more step to curb black money, after last November’s demonetisation exercise.
