Mumbai: Railway minister Suresh Prabhu on Thursday said the railways has set up a group to study the impact of the soon-to-be-launched goods and services tax (GST) on its operations.
"Inevitably all sectors will be affected (with the GST rollout). Not to say that the railways will be immune from this. We are studying the impact. In any case, it is the law of the land so we will adopt it. We have already set up a group to look into the implications of GST on all our operations," Prabhu told reporters on sidelines of IMC annual general meeting in Mumbai on Thursday evening.
The immediate impact of GST will see a 50 bps increase in AC and First Class train fares to 5 percent from 1 July.
But he was quick to add that in the long-run the new tax regime will be a great boost to overall growth which will help the economy clip at double-digits.
On the impact of GST on the transport sector which will be one of the biggest beneficiaries of the single taxation regime as border check-posts will be a thing of the past, he said this, in turn, should help the railways get better.
Increased movement of goods will help create lots of ancillary activities around the transportation sector, he added.
Hailing GST as a game-changer, he said the move would widen the tax to GDP ratio as it has the potential to add at least 2 percentage points to GDP going by the global experience.
Prabhu urged the states to implement the new tax reform in the right spirit. "I hope all the states will now join hands to implement it in the right spirit and make it a great opportunity for faster economic growth that will help address social problems."
Published Date: Jun 29, 2017 10:32 pm | Updated Date: Jun 29, 2017 10:33 pm