Why there is a need of a Uniform rate of tax under the new mission of Atmanirbhar Bharat?

Since a very long time there was a need for Uniform tax rate in India, and the Indian Government in consonance with their policies and other strategies Implemented Goods and Service Tax (GST) on 1st of July 2017, this system of implementing a single tax regime was criticized by each opposition but the ruling government incorporated it and implemented it for the betterment of our economy. This tax regime would completely replace the old setup of tax system, which earlier provided several loopholes and paved the way for tax evasion. This system was established to boost our country’s Economy and also for Ease of doing business status in our country. This regime replaced all the central and state taxes and thus bringing about a ‘One Nation and One Tax’ system in 2017. The GST council was established in order to determine tax slabs for each and every goods and services which are being rendered. However Sectors like Petroleum, Real Estate and alcohol were exempted From GST.

“Ease of Doing Business Index under New Mission: Atmanirbhar Bharat”

This mission was established to boost the Indian Economy and urge the Indian Industries and Manufactures and other service sectors to expand their products globally. This was just one aspect; other thing was to attract foreign investor to invest in India and expand and manufacture their products in India and export globally. For instance Apple Inc. to Invest in its Bangalore factory to expand its production of Manufacturing IPhones.

Atmanirbhar Bharat actually means Self Sufficient India, and this mission is an Extension of the campaign ‘Make in India’ which focuses on growth of Indian companies as well. This mission focuses on economy, Infrastructure, and other sectors like MSME’s and Agriculture.

When the Goal is to promote Business and Investment Sector in India, the first thing which comes to my mind is Ease of doing Business in India. If we go through the past, Indian government has adopted significant reforms which had improved India’s Ease of doing business Index rank from 142 in 2014 to 63 in 2020. This Aspect is mostly looked by investors before Investing and it is considered as one of the most important indicators in today’s world. Currently Indian Government is eyeing on to reach the Top 50 nations in Ease of doing business and to achieve this, the government should put in further reforms in taxation regime. The chief of 13th Finance commission, who is considered as man behind GST had argued for Uniform that is Single tax rate system in his book called ‘In service of the Republic: The Art and Science of Economic Policy’.

Single Tax Rate System

This tax rate means that there should be one tax system which should be charged on each and every product produced in India, This shall reduce the burden of compliance in Tax which similarly reduces the time of filing returns for individuals and groups and helping India improve in Ease of doing business. This will further increase competitiveness in Market. This flat rate should bring in following things and should be taken into consideration

  1. Simpler GST regime
  2. Curtailing the biasedness between states with respect to product taxation
  3. There will be overall decrease in Tax incidence in the country
  4. Better efficiency and Transparency.

It is mandatory to accomplish the given objectives for Achieving the Success of Atmanirbhar Bharat Campaign. This System would enhance better calculations of tax and would increase efficiency within the administration and thus will attract more foreign investors. The single flat rate would reduce biasedness between states in taxation on different goods and services, which discouraged manufacturers of goods and services in all over sectors.

Model tax regimes

As we see New Zealand and Singapore have adopted a single tax rate or standard tax rate for indirect taxation. Both of these countries have Ranked 1st and 2nd respectively in ease of doing business ranking 2020 and in the indicator paying taxes, both New Zealand and Singapore have ranked high due to simplified taxation regime and have ranked 9th and 7th respectively out of 190 Nations whereas India in the same category has been ranked at 115.

Singapore has one Standard tax rate at 7% and other NIL being exempted, so all the product attract 7% of GST, this was increased from 5% to 7%. Adopting this model it is necessary for India to adopt a single Tax regime to improve ease of doing business index in our country. New Zealand on other hand shifted to uniform tax regime in the year 1986 and it collected 15% on all goods and services. This model should be incorporated in the Indian context and thus will improve competitiveness of Indian industries. US based tax foundation has ranked New Zealand tax system as 2nd best tax regime in developed world economies for its competitiveness. It is true that India should adopt New Zealand model of tax regime but the standard rate should be reduced or else it will discourage business and will not attract any foreign Investments.


To additional improve the seriousness of the Indian business, this change force must be continued with standard checking. Similarly, it is significant that Central and state governments guarantee the changes arrive at the grassroots business viably with momentary measures and long haul procedures. To start with, the online Single Window System (SWS) is a compelling method to excuse strategies, time and cost of activities for organizations. While a lion’s share of the states have embraced it, the SWS ought to be set up by all states and Union Territories inside the following a year. The adequacy of the SWS can be reinforced across India by the usage of specific estimates, for example, setting up a Central Monitoring Mechanism headed by the main secretary for looking into the SWS of different states at ordinary stretches; guaranteeing ideal mechanical updates of the online entrance; improving viability of the Right to Services Act and empowering self and outsider accreditations, and so forth.



B.A. L.L.B – 5th Year

CHRIST (Deemed to be University) Bengaluru

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