Why PM Modi Pushed for GST Implementation

Over 17 years of debate and countless meetings, the implementation of the Goods and Services Tax (GST) seemed to be a long-awaited reform. The GST, which was first proposed during the National Democratic Alliance (NDA) regime, has finally been brought into effect. However, the push for its implementation by Prime Minister Narendra Modi has sparked some skepticism. In this article, we delve into the reasons behind PM Modi's haste in implementing the GST and the implications of this decision.

Constitutional Mandate and Legislative Push

As a constitutional amendment passed by the Parliament mandates the enforcement of GST by September 15, 2017, it creates urgency. If the government fails to implement GST by this date, they would require the consensus of the Parliament once again. All opposition parties must agree to any new taxation system. Additionally, the first quarter of the financial year 2017 ends on June 30, and many states have quarterly returns due. Consequently, the period from June to September was the most suitable for implementing the GST, leading to its launch on July 1, 2017.

Legal and Political Implications

There are several legal and political reasons why PM Modi is eager to implement the GST. Firstly, if the GST is not levied by September 15, 2017, both the state and central governments will lose their authority to collect taxes that are to be subsumed within the GST. This would leave the government without a legal taxation system and the ability to collect necessary revenue. The Finance Minister, Arun Jaitley, warned that after the passing of the GST bill, its implementation is a constitutional requirement to be within a year. Given that the GST bill was passed in September 2016, failure to implement the GST by mid-September 2017 would mean that there would be no legal taxation system in the country.

Opposition and Criticisms

While some see the haste as a necessity for legal and constitutional reasons, others argue that PM Modi is rushing the implementation of GST. Critics contend that PM Modi is overly eager to enforce GST primarily to ensure the effective collection of taxes. Some view the implementation as a rush to comply with the constitutional mandate, despite the lengthy debate. However, PM Modi and his government believe that the implementation of GST will bring transparency and efficiency to the taxation system, thereby improving the overall economic landscape.

Optimal Approach: Implementation and Improvement

PM Modi and his team argue that it is better to implement the GST and then work on improvements rather than delaying it. The implementation of the GST has been a collaborative process involving intelligent minds and experts to iron out the details. With the system in place, feedback can be gathered and used to address any shortcomings. Apart from the constitutional deadline, there is an objective of creating a unified tax system that simplifies tax procedures and reduces the burden on businesses, which have faced complex tax laws under the existing system.

Conclusion

The implementation of GST by PM Modi is driven by both legal and economic considerations. While there are valid concerns about the rush, the GST system promises to bring a much-needed overhaul in India's indirect tax regime. As the government moves forward, the challenge lies in fine-tuning the system based on real-world experiences and feedback from stakeholders.