GST - One Nation, One Tax

The Goods & Services Tax, now better known as GST, will subsume a number of different taxes levied at the central and state level. It is going to put in place an amalgamate value-added tax system. This will eventually lead to the country functioning as one big common market sans added taxes at different levels.

The effect of GST on the food industry is at multiple levels. For starters, agricultural produce will become more mobile as trucks carrying perishable commodities will be able to move around without much difficulty. Currently, local produce rarely crosses state borders because of the Central Sales Tax (CST), but once the GST is in place, food from one part of the country can travel places without added taxes.

The Chairman at CII National Committee on Food Processing, Piruz Khambatta comments: “The biggest pro of GST is that we will have a single tax without the cascading effect of multiple taxes, so only value addition is taxed at each point that is a healthy international practice”.

“These multiple taxes are nothing but a route to cheat people,” said Vijay Setia, leading basmati rice producer and past president of All India Rice Exporters Association. “GST is a welcome move as there will be more transparency in the system. There will be a common market in the absence of CST and entry tax.”

This will eventually lead to a fall in retail prices, which is obviously a good thing for consumers. The industries benefiting from the GST reform are the retail, logistics, FMCG, automobile, multiplex and cement industry.