MUMBAI: RBI governor Urjit Patel on Thursday said the soon-to-be implemented goods and services tax (GST) will not only create a national market but also broaden the tax base, which in turn will lower the overall taxes in the long-term.
“The prudent point is that GST itself is part of the digitisation revolution, which along with the reforms on the information tax side in terms of the processes and operations, have the potential to broaden the tax base considerably,” Patel told an event organised by IMC Chamber of Commerce and Industry.
The governor also said GST is a precursor to a low tax regime in the country at a later stage. With a four-rate structure, GST will come into force from the midnight of June 30. Except J&K, all states have passed enabling laws for its implementation.
He said the broadening of tax base is an important outcome of the new uniform taxation regime and other initiatives on e-payments and digitisation. GST will also reduce many inefficiencies within the states while moving goods from within a state and also across the country, the governor said.