When you want a plant to grow you water it daily, you see that it gets proper sunlight. In other words you see make conducive environment for it grow. For India to grow there is a requirement for such an environment. A just and equitable tax regime is one of the very important component for creating such environment.
For Indian economy to be a superpower, it does not only need to repair current glitches in its system but also introduce some new effective laws that would create a conducive environment for economy to thrive.
Here stepped in GST i.e. goods and services tax, which will have following benefits:
1. Remove cascading effect of current taxes
2. Same tax on each good under different states
3. Unified tax structure
4. simplified compliance procedures
5. Ease of doing interstate business
6. More transparency& accountability
As we already know GST has changed the existing business structure in India, it has also transform the import-export scenario in the country. This Research paper will discuss not only the concept of GST but also how it influences foreign trade of India.
Keywords: GST, Imports, Exports
After the enactment of various GST laws, GST was launched with effect from 1st July 2017 by Sh.Narendra Modi, Hon’ble Prime Minister of India in the presence of Sh.Pranab Mukherjee, the then President of India in a mid-night function at the Central Hall of Parliament of India (https://www.gst.gov.in/about/gst/history).
GST is a comprehensive, integrated ,destination based indirect tax that is levied on goods and services. It is the biggest tax reforms of all times that has drastically changed the way business is done in India. It is a complete change over from earlier indirect taxes like VAT, Excise duty, custom duty, which focuses on elimination of cascading effect of taxes and ultimately reducing the overall burden on consumer. According to Shukla (June 2017) GST will help in making Indian products competitive in not only domestic industry but with international markets also. This tax reform will not only benefit all end consumers at large but also benefit the economy in long run. Last but not the least, this tax, because of its transparent and self-policing character, is easier to administer
GST has a deep impact on all the sectors of the economy ,may it be FMCG ,retail, financial services, Information technology etc, but this research paper focuses GST’s implication on foreign trade of India.
1.2 Literature Review
As par Sijbren Cnossen (1)(2013) India is at a crucial crossroads in its fiscal history. Following years of having to make do with archaic systems of excise duties and sales taxes, it now has the opportunity to introduce a modern GST at the central and state levels.
Earlier there was clear demarcation between the laws made by central government and state government. Central government use to make laws on manufacture of goods and state government use to make laws on sale of these goods. As far services are concerned, centre alone had right to charge service tax on services. Similarly, custom duty was also charged by central government alone on imports. Although there was no overlapping of laws as such but with so many different taxes and so many compliances ,it was not only difficult for consumers but also was a problem of administration for government as well. Introduction of GST not only brought whole nation under unified taxation system but also made compliances easy comparatively. (GST concepts and status cbec website)
According to Dr Syeedun Nisa(2017) GST is expected to overcome all the shortcoming of former indirect taxation system, by introducing a simple ,unified, efficient tax structure in India with a comprehensive tax levy on goods and services alike.
According to section 269A, ”269A. (1) Goods and services tax on supplies in the course of inter-State trade or commerce shall be levied and collected by the Government of India and such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the Goods and Services Tax Council.
According to Monika Sehrawat, Upasana Dhanda (2015),GST will be divided into CGST and SGST, i.e. both centre and state will collect taxes simultaneously.
India has adopted Dual GST Model under which both state and central government will collect tax on goods services or both.