Just a day after the India’s GDP growth in the July-September quarter showed a growth rate of 6.3 per cent after the previous quarter recorded a three-year low of 5.7 per cent, Finance Minister Arun Jaitley on Friday said the Goods and Services Tax (GST) has made doing business easier for traders by expanding the market place and reducing tax compliance burden. He also affirmed that the two structural reforms by the Narendra Modi government — GST and demonetisation — will benefit the economy in the medium and long-term.
While responding to questions regarding the second quarter economic growth estimates, the finance minister said, “GST has made doing business and trade very easy. The market size for every trader has grown. Now whole country is his market.”
After reversing a five-quarter slide in Gross Domestic Product (GDP) growth, India’s economic growth bounced back from a three-year low to expand by 6.3 per cent in July-September quarter as manufacturing increased and businesses adjusted to the new GST tax regime. The growth rate had slipped to three-year low of 5.7 per cent in the first quarter of 2017-18 financial year.
Jaitley said that the GST has also reduced the compliance burden on traders as under the new regime a trader is not required to file multiple tax returns. “The tax rates too are being rationalised and a trader will no more be required to confront inspectors,” he added.
While the impact of demonetisation of high-value currency notes of Rs 500 and Rs 1000 in November last year was limited to one or two quarters, the impact of GST was limited to one quarter, mainly because of de-stocking by corporates, said the finance minister.
“The GST impact was only for one quarter mainly because of destocking. That was our assessment. The (GDP) figures indicate that. Structural reforms benefit in the medium and long-term. Both these steps will benefit the economy,” Jaitley said.
With PTI Inputs