Boost for busi­ness as In­dia over­hauls tax sys­tem

The Myanmar Times - - International Business -

WHEN trader Vivek Mehra buys art­work from the re­mote cor­ners of In­dia, he braces him­self for a world of pain as he nav­i­gates the coun­try’s no­to­ri­ously com­plex tax­a­tion sys­tem.

But Mr Mehra, who makes and sells fur­ni­ture, is among throngs of busi­ness own­ers hope­ful Prime Min­is­ter Naren­dra Modi’s moves last week for a new, sin­gle na­tional sales tax will make life much eas­ier.

At the mo­ment, Mr Mehra has to pay dif­fer­ent rates of sales tax in dif­fer­ent states, a pol­icy that means end­less hold-ups when cross­ing in­ter­state bor­ders.

“You can be stranded be­hind 300 trucks at the bor­der and even one sin­gle piece of paper miss­ing can mean your load is con­fis­cated,” he said.

Law­mak­ers have voted in favour of scrap­ping In­dia’s jum­ble of fed­eral and state taxes and in­tro­duc­ing a sin­gle goods-and-ser­vices tax (GST), cre­at­ing a com­mon mar­ket.

The gov­ern­ment said the move, hailed as In­dia’s most sig­nif­i­cant eco­nomic re­form in decades, would re­duce dou­ble tax­a­tion, cut red tape and make the sys­tem more ef­fi­cient.

Ex­perts said the tax could even­tu­ally help boost In­dia’s al­ready strong eco­nomic growth by up to two per­cent­age points.

“Con­sump­tion will go up, pro­duc­tion will go up, in­vest­ments will go up, in­vest­ment into pro­duc­tion will go up, so this is a great devel­op­ment,” said Adi Go­drej, chair of con­sumer goods gi­ant the Go­drej Group.

“To my mind it is the big­gest eco­nomic re­form af­ter the lib­er­al­i­sa­tion of 1991,” he said, re­fer­ring to his­toric moves to open up In­dia to in­ter­na­tional trade. –

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