goods and services Tax: Union Finance Minister Nirmala Sitharaman on Saturday said the Goods and Services Tax (GST) has strengthened the revenue boom of states and its all-round benefit is “exemplary”.
He said on GST Day 2023 that the multiplicity of taxes in the pre-GST regime resulted in a “tax-on-tax” effect, which resulted in the same product being taxed multiple times and hence costlier for consumers.
Comparing the tax rates before and after GST, Sitharaman said, “GST has done justice to the consumers by reducing the rates as compared to the previous regime.”
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‘India’s indirect tax system was fragmented before GST’
Before GST was implemented, India’s indirect tax system was fragmented, with each state effectively a separate market for industry as well as for the consumer.
“Whether it is the common consumer, whether it is the state government, whether it is a matter of tax buoyancy, whether it is making it digital and simple, GST stands as an example,” Sitharaman said.
The revenue buoyancy of the state was 0.72 before GST, while it is 1.22 after GST. Sitharaman said, “GST has brought more buoyancy. So, both the Center and the states benefit. Today, after GST, no state loses (revenue).”