Management News

GST – Taking the rough with the smooth

The GST is here, finally. It has been a long and winding journey with many an ambush along the way. The idea of GST was first mooted in 1994—and since recommended by the Asim Dasgupta Committee in 2000 and by the Vijay Kelkar Committee in 2004—in which I was privileged to be a member.

The GST is easily India’s most daring and potentially impactful reform since Independence. It is expected to liberate industry and trade from the jumble of central, state, and local taxes and provide a simple, tax regime that will inject efficiency, widen the tax base, and turn India into a truly single market.

Indian GST is a dual taxation system and not a one-country-one-tax system as it is in some other countries. India’s federalism allows both the Centre and the states to charge taxes and its democracy involves taxation at rates of favour and disfavour.

GST rates are being set and reset and will probably continue to be adjusted for some more time because of their economic and political sensitivity. Many large sectors want GST tailored to their growth needs. The government has set up ten working groups to sort out issues of specific sectors, such as banking, telecom, IT, oil and gas, transport and logistics, and SMEs..... Page 10