On the 30th of August, the Legislative Council and Legislative Assembly of the most recently founded state of Telangana, passed a resolution accepting the proposed addition of the GST (Goods and Service Tax) bill to the Constitution.
This is an important development in the simplification of the taxation in India. Slowly but steadily, many states are passing the GST bill. Telangana is the 10th state to have ratified the bill. GST aims to reduce bottlenecks which are currently present. GST would eventually replace Central Taxes like Service Tax, Central Excise Duty, and Central Sales Tax and also State Taxes like Value Added Tax (VAT), Octroi and Entry Tax, and Luxury Tax.
This would essentially mean that goods, when the GST is implemented, would be able to move freely from one state to another and the current situation of waiting for hours at state border will not arise. It also would eliminate a lot of paperwork in the future.
It has been agreed by a lot of people that GST would ease doing business in India and it marks an important step in the way indirect taxes are implemented in the country.
The Deputy CM of the state, Kadiyam Srihari, had tabled the bill. A special session was convened to discuss the GST bill.
The state of Assam was the first to have ratified the bill on the 12th of August. It has to be passed by more than half of the state legislatures to be implemented in the country and we are well on our way to seeing this reality! The Central Government has also assured all the State Governments that any losses that they will be incurring in the first five years after implementing the GST bill will be compensated.
The implementation of GST in India is expected to attract many more investors in the country because investors find it easy if there is an easy taxation system in place which reduces inflexibility and also corruption.