The Goods and Services Tax Act (GST), which was introduced in India from 1 July 2017, is positive for the country’s credit profile. Because of better tax compliance, government revenue will increase. This is what the American rating agency Moody’s said. Let us tell you that Prime Minister Narendra Modi and President Pranab Mukherjee had launched GST during a grand ceremony at the Central Hall of Parliament on the midnight of 30th June.
What Moody’s said:
William Foster, Vice President, Moody’s Investor Service said, “It (GST) will support higher government revenue through better tax compliance and administration. Both of these will be positive for the credit profile of India, which is helpless because of the low revenue base. ”
He further said, “We expect better tax compliance to encourage tax credit in GST systems, more ease of compliance; Through a common use, shared IT infrastructure between the Central and State Governments will be operated through a reduction in the overall cost of compliance with simplified tax rates across the country. ”
He further said, “We hope that the net effect of GST on government revenue should be positive.