With GST Act, all the supply of goods and services has been merged. Prior to the Act, there was one service tax rate and various exemptions. In each state, sales tax rates were numerous and in each state, they differed. And now all 17 rates have been combined into 5, 12, 18 and 28 slab rates. The concept of manufacture, chronically a recipe for Supreme Court cases, has now been abolished. Abolition of CST has made it easier for manufacturers to get the best quality goods from another state since the extra cost of CST is not there. In this context, the findings of IMF (reported in TOI, February 17) that the potential revenue is 8.2 % of GDP and actual realisation is 5.8% (meaning the collection is lower by 40%) is seems exaggerated.
Three cheers for GST – biggest achievement is cooperative federalism, which was unthinkable earlier
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