Will GST also go the demonetisation way?
GST has to be in place latest by the 15th of September 2017, that is less than ten months away. We are still to have a consensus on who will administer the GST and the laws are to be passed by the Parliament and thirty one States/UTs with Rules instructions etc. What will happen if the GST cannot be implemented by 15th September 2017? Perhaps, the States will not be able to collect the tax while the Centre can. And the Centre can collect other unmentioned taxes also.
Can we have a one tax collected by the banks instead of the CBEC and/or the State Commercial Tax departments. Maybe there should be a 1% tax on all banking transactions, automatically deducted by the banks for every transaction - receipt or payment. There will be no need of registration, accounts, returns, complicated compliance procedures and above all no need of officers. All taxes except Customs duties can be abolished and the Central Government can distribute the banking tax collected among the States and Municipalities & Panchayats. Cash transactions above Rs. 10,000 will be banned and there will be no tax on cash transactions below Rs.10,000. Cash withdrawal above Rs. 10,000 will not be allowed. Once we run a less cash regime for a year or so, there can be another demonetization of the entire currency.
We cannot prevent corruption, we cannot eliminate black money, but we can certainly reduce these. And maybe it will take another fifty years before we catch up with these evils.