GST regime would be a complete new era or only an old wine in a new bottle.

All India Goods and Services Tax(GST) which has been recommended by Kelkar Task Force on implementation of a FRBM Act 2004 are to roll out by way of a model worked out through consensus between Centre and the states

. GST is one single uniform levy which clubs in itself large no of central and state indirect taxes, including cess and surcharge, which have brought about major distortions in the India‘s indirect tax structure leading to a huge cascading burden and making the tax structure more complex in the process also giving rise to problems of evasion, administration and disputes. The model GST is to be implemented over a three year period beginning from April 2011. So that by the terminal year 2013-2014 there shall be one uniform levy.

While GST is for all purposes a consumption based tax and in the nature of a final point retail tax it is expected to increase demand and consumption particularly in better of states because of reduced overall burden of indirect taxation which on an average amounted anywhere between 20-24% tax ranges. The fact that ultimately tax rate is going to be 16% in itself is expected to boost demand, promote exports by way of reduced rates.But some people doubt about the GST regime because as of now services are taxed at 10%, but under GST regime it is going to be 16%, which means that services become more costly. Same as under VAT the standard rate is 12.5%, while merit rate i.e. rate for essential goods is 4%, whereas under GST regime the essentials and non-essentials both would be taxed on same rate .

The major objective of GST is that by doing away with cascading burden it will moderate the overall prices and lead to rise in consumption and demand and thereby GDP. But this would happen only if the benefits of lower rates of GST are cost on to the final customer.