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The Philosophy Of Tax Reform

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The philosophy of tax reform has undergone significant changes over the years in keeping with the changing perception of the role of the state.‭ ‬The recent approaches to tax reforms lay emphasis on minimizing distortions in tax policy to keep the economy competitive.‭ ‬Minimizing distortions implies reducing the marginal rates of both direct and indirect taxes.‭ ‬To achieve this,‭ ‬emphasis has shifted from vertical equity to horizontal equity.

The concept‭ ‬of‭ ‬“GST‭”‬ or‭ “‬One Nation,‭ ‬One Tax‭”‬ has gained prominence in recent times.‭ ‬It has become a buzzword in the vocabulary of polity and economic reforms.‭ ‬Article‭ ‬366‭ ‬of Indian constitution defines GST as‭ “‬any tax on supply of goods or services or both except taxes on
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Objectives Of The Paper To highlight the prospects of GST. To study the challenges faced by government in the execution of GST.

Research Methodology
The proposed paper is mainly descriptive in nature. It is solemnly based on secondary data and information which is collected from the concerned sources as per need of the research. The relevant books, documents of various ministries/departments and organizations, articles, papers and web-sites are used in this study.

Goods and Services Tax: Its Need In India:
Introduction of GST to replace the existing mutiple tax structures of Centre and State taxes is not only desirable but imperative in the emerging economic environment. Increasingly, services are used or consumed in production and distribution of goods and vice versa. Separate taxation of goods and services often requires splitting of transaction values into value of goods and services for taxation, which leads to greater ccomplexities, administration and compliances costs. Integration of various taxes into a GST sysytem would make it possible to give full credit for input taxes collected. GST, being a destination-based consumption tax based on VAT principle, would also greatly help in removing economic distortions and will help in development of a common national market.

Goods and Services Tax in India: Four-Tier Rate Structure:
The fixing of a four-tier structure by the GST council is one step
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