India’s goods and services tax (GST) regime was launched with much fanfare on July 1, 2017. It was marketed by many as the nation’s second ‘tryst with destiny’, a reform that would unify the country by creating a single market while ushering in excellent ease of doing business.
It was said that gross domestic product (GDP) would rise by 1% to 2%, inflation would decline with the elimination of the cascading effect and the ‘black economy’ would be checked. It was supposed to benefit backward states which are consuming states since GST is a last-point tax – collected where the final sale occurs. It was pitched as a win-win situation.
Government officials, writing on the occasion of the completion of five years of operation of GST, have enumerated the various benefits but admitted to some problems which they feel can be sorted out soon. The Congress has asked for a revamp of the GST since it is fundamentally flawed that a bit of tinkering cannot resolve. Many of the states have been expressing their concerns for some time, most recently in the just-concluded GST Council meeting.
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