The implementation of the Goods and Services Tax Act marks the end of a parallel economy that thrived outside the tax system. No one can afford to remain outside the GST Network because anyone buying a product from outside the GST Network will not be eligible for input tax credits when he sells it later.
Consumers will benefit from fewer levels of tax collection and the abolition of entry taxes and services taxes. This should lead to a fall in prices in the long run. However, several products may actually become pricier due to the uncertainties in the initial months.
But who will audit the new system? We had excise audit and VAT audit earlier. What will happen to the old cases? What about the orders of the Supreme Court and the high courts?
Disputes and cases from the old system will continue for some more time. Those disputes will be settled in accordance with the laws in force until July 1. The central government may announce a deadline to settle old cases soon.
(The writer is a senior partner at E&Y)
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