UPDATE ON GST- ONE NATION, ONE MANY TAX”

UPDATE ON GST- ONE NATION, ONE MANY TAX

In the beginning of the month of July 2017 the Government introduced the long awaited GST law with the punch line of “One Nation, One Tax”. Due to the recent development motivated by the political and practical glitches of coordination and co operation between states and centre, the said intention of the government to have a uniform tax structure all over the nation seems to be crawling towards a not so happy end.
The states have been given a power to decide among the two threshold limits at their discretion i.e. 20 lacs or 40 lacs. The increased (exemption) limit (of Rs 40 lakh) is applicable for those businesses who deal in goods and also do intra-state trade and not for those who do inter-state transactions. The recent liberty given to states to decide the threshold limit for registration under the GST act is a severe harm to the uniformity of tax practices all over the nation, although most of the states had agreed to keep the threshold almost same as recommended by the centre.

Among others, the recently given power to state of Kerala to collect cess in the state for next 2 years (which appears to be a very genuine and necessary step for the rehabilitation of the state) will be a sore in the eye of the other states. As these state may be looking for ways to increase their revenue as is evident from the past experiences and this too may be used as a tool to collect the revenue ultimately disturbing the uniformity of tax structure.
The power given to states to decide their own threshold limits for generation of e way bill for intra movement of goods also raises question on the intention of uniformity of tax practices. Some states have notified parallel rules and procedures for e-way bill generation. Bihar has increased the threshold limit to 2, 00,000 INR for mandatory generation of e-way bills. Likewise, Delhi, Tamil Nadu, Maharashtra and West Bengal have increased the threshold limit to 1, 00,000 INR. On the other hand, Mizoram has reduced the threshold limit to 10,000 INR. In order to meet the primary objective of a uniform nationwide e-way bill system, the government should work for consistent e-way bill rules.
In this context, previously many movies like GST was also declared tax free in the state of Uttar Pradesh. This kind of actions of state are taking the nation unconsciously towards the old taxation system and the same needs to be well controlled by the centre otherwise all the chaos tolerated by the economy to absorb the shock of GST will be same as before and will be again known as “one nation so Many tax”.
This is solely for the educational purpose.
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