Term economic barrier under GST

Meaning of term economic barrier under GST


Economic barrier

The details about economic barrier are explained here. 

In theories of competition in economics, a barrier to entry, or an economic barrier to entry, is a cost that must be incurred by a new entrant into a market that incumbents do not have or have not had to incur.

GST impact on octroi check posts: States remove barriers, once choked check posts now clear. The removal of these barriers can also be seen as the symbolic as a manifestation of 'one nation, one tax' this was also the guiding principle behind the GST.

The Ministry of Finance has said that 22 states across India have abolished check posts on July 1 when the Goods and Services Tax (GST) was implemented. The abolishment of these checks posts, which collected tax from mostly commercial vehicles, is the first visible impact of GST for thousands of Indians across the country. The removal of these check posts can be seen as a removal of barriers between two states within the country. The removal of these barriers can also be seen as the symbolic manifestation of ‘one nation, one tax’ policy that was also the guiding principle behind GST.

Delhi, West Bengal and Maharashtra have abolished check posts within three days of the implementation of the GST, while eight states, namely, including Himachal Pradesh, Punjab and Assam are in the process of removing these check posts, according to the Finance Ministry. These check posts scrutinise material and location-based tax compliance, resulting in delays in delivery of goods and cause environmental pollution as trucks queue up for clearance.

One big advantage of the GST, which was seen from the planning stages was that it has the potential to reduce the logistics cost by speeding up movement of goods across state borders and even within states and thereby make the country’s goods and services more competitive

The Goods and Services Tax is an all-encompassing, pan-India indirect tax system. The new tax regime has cut out the cascade of multiple taxes which increase the price of items.

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