Union Finance Minister Arun Jaitley has expressed his confidence that the implementation of the Goods and Services Tax (GST), along with demonetisation will bring more revenues as far as states and the central government are concerned and enlarge the size as far as the formal economy is concerned.
Talking about the impact of demonetisation, the Minister has said that the move shook the system for some time but is now gradually increasing the process of integrating India’s shadow economy with the formal economy. He also said that the size of the formal economy is growing, so are the transactions in the banking system and through the digital mode.
Asserting that India is largely a tax non-compliant society, Finance Minister said that states and the central government struggled with their revenues to run the system which created an unfair enrichment in favour of the evader. He also said that the country also becomes very unfair on the normal taxpayer because what the evader manages to evade is what the compliant has to pay more. He added that, therefore, the government had decided to withdraw high-denomination bank notes of Rs 500 and Rs 1,000.
On the GST front, Jaitley said that most of the contentious issues have been sorted out between the Centre and states. He also said that national indirect levy—Goods and Services Tax (GST)—is all set to become a reality by July 1 and further noted that GST will make India one single market, eliminate multiple assessments, check evasion and bring more revenues into the system.