One Country One Market One Tax.
Goods and Services Tax is finally here. GST is tad bit late. Say by a decade. Starting from Canada, Australia, Japan, Europe and even Malaysia has it. All had to face its share of woes in switching to new system of taxation. Historically the idea is as new as Internet. Taxation is prerogative of every sovereign authority. In democracy there are too many sovereign authority in practice than in theory. GST will replace, Excise, Counter-veiling duty, VAT (Sales Tax), Luxury Tax, Entertainment Tax, Entry Tax and Octroi among others. But let’s note the key benefits.
Eliminate tax on tax.
As mentioned above many taxes are imposed on the price inclusive of goods. For example excise is levied when goods leave factory and is included in the price realised by manufacturer. Sales tax or VAT is levied when goods are sold by retailer. Yet again luxury tax is levied if sale is made at an establishment treated as luxurious viz 5 star Hotel. Continue reading