One Nation, One Tax, One Market In India: An Analysis

The paper aims to review the need for the introduction of a single tax system in the form of Goods and Services Tax (GST) in India that has been operational since 2017, and analyses the implementation issues, and studies its impact on the consumers, business and the global economy. India is promising for Make in India in the race of global competitiveness. After prolonged discussions and debate for a couple of years, the Indian government has adopted the GST system. The GST embodied on the principle of one nation, one tax, and one market is aimed at unifying the country’s $2.4 trillion economy and 1.3 billion people into a common market. It is a single tax system of goods and services introduced with the objectives of expanding the tax base, reducing cascading and double taxation and harmonizing the indirect tax regime in India. The new tax regime is broadly expected to lower overall tax burden on goods and services, to develop the common national market for goods and services by eliminating unhealthy and unfair practices and to improve the competitiveness of domestic industry, thereby improving the GDP. As such, it is supposed to be very beneficial to business and consumers. With regards to the operation of the new system, it provides some breathing space for companies to fine-tune their IT systems for reporting requirements under the GST. While the government seems confident of being GST-ready smooth sailing, the industry is still preparing itself to meet several implementation challenges. Amongst the several transition issues and implementation challenges being faced by the industry are: treatment of closing inventory, adherence to anti-profiteering provisions, modification of IT systems to make them GST-compliant, intra-branch supply of services, and determining the place of supply and location of the recipient. But how is consumers’ life, the end user’s pocket is being impacted post GST, needs a look. Besides, when GST systems in various forms are operational in more than 130 countries, Indian move to GST system seems positive ramification at least in the international trade. The study is based on secondary data sources and field experience. The expected outcome of the analysis would bring to the attention of all the stakeholders, particularly the policy makers and the government to bring suitable amendment(s) to the new system, if necessary, and build supportive infrastructure to boost the economic growth.