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The GST bill is planned which was effective from 1st July. It is the biggest tax reform that is undertaken since Independence. It includes all indirect taxes to create one rate so that the country is integrated into a single market.
When GST came into force, it has replace at least 17 state and federal taxes and brought them under a single unified tax structure.
GST is a comprehensive indirect tax that has been manufactured, sales and consumption of goods and services throughout India to replace taxes levied by the central and state governments. GST has brought about a qualitative change in the tax system by redistributing the burden of taxation equitably between manufacturing and services as well.
The International Monetary Fund has appreciated India’s effort to reform the country’s taxation system. IMF Deputy Managing Director Tao Zhang said that The government has made notable progress on crucial economic reforms that would support strong and sustainable growth in the future.
On November 8, 2016, the Prime Minister scrapped ₹500 and ₹1,000 notes to take a step to root-out black money and fake currency in the Indian system.
After, six months it was noticed that the move was not able to achieve the desired results, as fake currencies were still running and corruption was still Unhindered. Nevertheless, the government succeeded in profiling the people, by getting to know the difference between the actual flow of money and the undeclared money. Lately, it was reported that India has more car buyers than the taxpayers in the country.
In the year 2016, there were 5.5 lakh people, out of the 3.65 crore individuals who filed returns and paid income tax of more than Rs 5 lakh and accounted for 57 per cent of the total tax collection. This, essentially means that only 1.5 per cent of those filing tax returns (i.e., 3.65 crores) were contributing to 57 per cent of tax kitty. The Prime Minister wanted to address this issue by bringing the unaccounted money into the banking channel.
While many top-notch economists were divided over demonetisation’s impact on the economy, former UIDAI Chairman Nandan Nilekani praised Modi’s demonetisation move and said that it would see a massive activation of digitisation of financial services in the country. He also mentioned how India’s over 80 per cent workforce will come into the formal channel.
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