As the state assembly passed the goods-and-services tax (GST) bill, Goa moved a step closer to becoming a more unified market along with the rest of India. This is the most profound change this monumental tax reform act will bring for the average consumer in Goa. GST will result in the same rate of taxation for most products and services across all the states of India, with a few exceptions. Due to this, India as a whole, will become one market for manufacturers, who will be able to design their logistics network as per the needs of the market and not as per the various taxes prevailing in states.
GST will absorb a number of taxes like octroi and entry tax, which act as trade hurdles for inter-state movement of goods. Research indicates that trucks lie idle for 30-40% of time during their delivery schedule due to taxes likes these. Thanks to GST, inter-state movement of trucks will be a lot faster. Apart from that, companies will be able to decide the location of warehouses in accordance with the needs of the overall market in India. As of now, when deciding where to have warehouses, companies consider states as separate markets due to different prevailing rate of tax. All this will end with the GST.
This means a lot to consumers in Goa because movement of products to the state from Karnataka and Maharashtra will become a lot smoother. At the moment, the retailing scenario in Goa is not at par with Mumbai or Bangalore. At times, automobiles are launched later in Goa than other markets. Such problems will be taken care of, at least to the extent that several indirect taxes were becoming a hindrance.
Apart from this, GST will reduce a lot of headache businesspeople have to go through, when it comes to paying innumerable taxes. More taxes mean more effort spent on maintaining records, following deadlines and many other hassles. Since GST will absorb a number of taxes, such troubles too will come to an end.
Having said that, it is extremely important that the business community understands the nuts and the bolts of this tax. GST will work on an input-tax-credit system and people will really have to know it to the last detail, else they may end up paying much higher tax. Some sceptics have earlier argued that implementation of GST in other countries didn’t really improve growth in gross-domestic-product (GDP). But, even without higher GDP growth, there is no denying that a uniform tax rate across India is the way to go for our economy because only then there will be a unified market and products will be bought basis their merit.
