The Origins of Taxation: In the olden days, tax was levied on people to raise resource for the rulers. As societies turned to democracy from monarchies, the system of taxation was carried over to ensure smooth performance of government. A goods tax was levied on goods sold in a particular area to add to the treasury finances. In a lot of places people were levied octori on goods passing through the land. In return the rulers ensured safety of transport. The surplus money generated by taxes was used for the betterment of the lot of people.

The Effect of Taxes on Goods: Taxes were imposed on every bit of economic activity. The major forms of taxes were the goods and sales tax that required everyone into trading of material to pay taxes. The good part of taxes paid is returned to the tax payer by way of roads, hospitals, airports, bridges, better infrastructure etc. Thus paying taxes properly can be taken as our contribution to nation building. A moderate tax regime with due stress on its implementation would ensure better compliance and goes a long way in building up an equitable society.

The Most Modern Way to Taxation: As societies evolved from a predominantly trading to more service oriented communities, the separation between the two got blurred. This led to a more uniform style of taxation that did not distinguish between the goods and the services. The goods and service tax aims to bring about a uniform tax policy that aims to integrate the two for taxation purposes. The process would derive benefits from a more uniform structure that does not give one advantage over the other. The economies of scale achieved would lead to more efficient taxation systems.

The GST in India: With the introduction of the goods and services tax in India, the most comprehensive changes in the taxation structure in India since its independence in 1947 is set to take place. A large land locked country like India would gain immensely from the abolition of octori, making for a common unified trading market. People in some states would no longer have the advantage of being located close to manufacturing centers to get better prices. Since there would be no separation between sale of goods and rendering of services, the cost advantages of scale, works in favor of the larger organizations. The implementation would bring about a uniform market right across the entire country bringing forth advantages to the most efficient situations.