New Delhi, May 22 (ANI): Finance Minister Pranab Mukherjee has said that the primary benefit of the Goods and Services Tax (GST), when introduced, would be the removal of cascading effect of taxes which acts like a hidden cost and makes goods and services uncompetitive both in domestic and international markets.
Addressing the Second Meeting of the Consultative Committee attached to the Ministry of Finance here on Monday, Mukherjee said that GST would check leakage of revenue and the States should be able to realize tax revenues commensurate to consumption of goods and services within their territory.
He further said that it would provide a stable source of tax revenue and would play a very vital role in sewing India together into one common market.
Mukherjee said that for the consumer, the biggest advantage of the GST would be its transparent character as well as the reduction in the overall tax burden on goods, which is currently in the range of about 25-30 per cent.
Asserting that there are several factors that make the current situation conducive to the introduction of GST in India, Mukherjee said that studies have shown that the introduction of GST would act like a stimulus and instantly spur the rate of growth of the economy.
Mukherjee further said that the substantial and commendable efforts have been already put in by the Empowered Committee of State Finance Ministers in providing flesh and blood to the blueprint of GST suited to the Indian context. The first discussion paper on the subject was released by the Committee in November 2009, he said.
He said based on this conception, the Centre has already introduced a Constitution Amendment Bill in the Lok Sabha in February 2011--the first step in the legal process that would culminate into the GST.
He said that he is hopeful that the Standing Committee on Finance would soon give its report on the Bill so that the process of legislation in this direction can move forward. (ANI)