India has a diversified financial sector
undergoing rapid expansion, both in terms of
strong growth of existing financial services
firms and new entities entering the market.
The sector comprises commercial banks,
insurance companies, non-banking financial
companies, co-operatives, pension funds,
mutual funds and other smaller financial
What is GST
Goods and Services Tax (in short ‘GST’) is by far one of
the most awaited tax reforms in the country. With the
emerging consensus amongst the political parties and the
push voiced by the industry, there is a lot of expectation
that the Constitutional Amendment Bill will be passed in
this Monsoon Session. If this happens, the Government is
likely to push the implementation of GST with effect from
1st April 2017.
As the name suggests, Goods and Services tax is a tax levied
when a consumer buys a good or service. It is meant to be a
single, comprehensive tax that will subsume all the other
smaller indirect taxes on consumption like service tax, etc.
This is how it is done in most developed countries.
The GST tax rate is based on the destination based consumption
principle. It means that the GST liability would finally accrue at the
point where the goods were supplied to or where the service was
consumed. This means the final customer will pay the GST. The
very concept would not find easy acceptance with the people. A
lot of education and learning has to be propagated for the people
to understand the implications.