Image Source : PTI Union Finance Minister Nirmala Sitharaman
Goods and Services Tax: Union Finance Minister Nirmala Sitharaman on Saturday said Goods and Services Tax (GST) has strengthened the revenue buoyancy of states, and the all-around benefit stands out as “exemplary”.
The multiplicity of taxes in the pre-GST regime resulted in a “tax-on-tax” effect, causing the same product to be taxed multiple times and hence becoming costlier for the consumers, she said at the GST Day 2023.
Giving a comparison of the tax rates pre and post-GST, Sitharaman said, “GST has done justice to the consumers by bringing the rates down compared to the previous regime”.
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‘India’s indirect tax system was fragmented before GST’
Before GST was introduced, India’s indirect tax system was fragmented, where every state was effectively a distinct market for the industry as well as the consumer.
“Whether it is common consumer, whether it is the state government, a matter of tax buoyancy, whether it is making it digital and simpler, GST stands out as an exemplar,” Sitharaman said.
State revenue buoyancy pre-GST was 0.72, while post-GST, it is 1.22. “GST has brought in greater buoyancy. Therefore, both Centre and state benefit. Today, no state’s (revenue) suffers post GST,” Sitharaman added.
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