International Monetary Fund, the pioneer international organization of global monetary cooperation complemented the Indian Government on its passing of the GST in a note on ‘Global Prospects and Policy Challenges’ released ahead of the G20 Summit in China.
“India has recently taken important steps towards a national goods and services tax which, when fully implemented, promises to boost tax buoyancy and growth, including by enhancing the efficiency of the internal goods and services market,” it said.
Referring to government’s decision to set up a six-member Monetary Policy Committee (MPC) to decide interest rates, IMF said, “The recent formal adoption of a symmetrical inflation target by India should provide a robust institutional foundation for maintaining price stability.”
“Where inflation targeting frameworks are already established, improving the transparency of instruments and policy objectives can provide further assurance that contractionary shocks will be absorbed,” it added.
Goods and Services Tax or GST which was passed in the Rajya Sabha on 7th Aug 2016. It is all set to exonerate excise, service tax, state Value Added Tax (VAT), entry tax, octroi and other state levies after its implementation from April 1st 2017.
With the growing International Support, it is being assumed that the GST will not only put up India in a stronger position in the International market but also help in the growth of the GDP of the nation. It comes at a time when China’s growth is moderating and that of Japan is recovering.
With hopes being high, it will be interesting to see how this ‘mother of all tax reforms’ fares in times to come.
