GST is the biggest tax reform since 1991 when India opened its market first. Potentially one of the most dynamic economies in the developing world, India is hampered by a bewildering array of state-by-state tax codes that discourage doing business across state borders. The GST is widely viewed as a breakthrough that will allow the authorities to confront the problem, eventually creating a more unified economy that will allow businesses to expand nationwide far more easily.
Far from being only a tax reform, design of GST would have far reaching Macro-economic effects. It is expected that in long run Tax to GDP ratio will improve both for centre and states. As a consequence it will improve fiscal health of Centre and States and provide them with wherewithal to improve state capacity in delivery of basic services, augment infrastructure, etc. Another impact will be on ease of doing business which will improve many folds by this reform. Last but not the least, Logistic sector will see far reaching changes which will reduce cost of transportation and increase in competitiveness.
