They would scrutinize goods being carried and check for state tax compliance, resulting in long queues
Within three days of the rollout of the Goods and Services Tax (GST), 22 states have removed their border checkposts, even while the rest are in the process of doing the same. The checkposts are for scrutinising goods being carried for state tax compliance, and would result in long queues at the borders.
Those that have abolished checkposts include West Bengal, Delhi, Uttar Pradesh, Haryana, Gujarat, Kerala, Tamil Nadu, Karnataka and Andhra Pradesh. Eight states—namely Assam, Punjab, Himachal Pradesh, Manipur, Nagaland, Mizoram and Tripura—are in the process of removing them.
This move has brought some respite to drivers of trucks and other contract carriers from the seemingly endless task of getting their consignments and papers checked, causing delays and adding to costs.
According to credit rating agency Moody, GST will be positive for India’s rating as it will lead to higher GDP growth in the medium term. “GST will improve ease of doing business and enhance India’s attractiveness as a foreign investment destination,” said Moody VP William Foster. “It will support higher government revenue generations through improved tax compliance,” he added.
Meanwhile, NITI Aayog member Bibek Debroy has rejected the claim that GST would increase GDP growth rate, calling it “total rubbish”.
“Such speculations are based on the assessment of the 13th Finance Commission, which gave that figure for an ideal GST. We are nowhere near an ideal GST,” Debroy said. He called multiple rates GST’s “biggest problem”.
Interestingly, the maximum GST rate slab of 28 percent introduced by India is the highest among more than 140 countries across the world that have implemented GST. Argentina has the second highest GST rate of 27 percent, while the rate stands at 20 percent in the UK, 20 percent in France and seven percent in Singapore.
At present, India’s GST slabs are set at zero, five percent, 12 percent, 18 percent and 28 percent.