While the council’s logic for multiple slabs may run counter to the philosophy of a good GST, it was necessary to get the project off the ground. Its future structure should absolutely avoid the temptation of arbitrary rate fixation.
Opposition parties refused to attend saying that the tax system overhaul was “half-baked” and “rushed” to create a self-promoting spectacle.
There are a few kinks to be worked out, but if implemented well, the manufacturing sector could be a GST winner while the telecom sector is likely to be worse off.
Will the multiple rate structure go against the very idea of GST? How controversial will the proposed anti-profiteering authority be? How will unutilised money in the compensation be shared?
How will India’s sixteen-year-in-the-making tax system overhaul impact the economy, India Inc, the informal sector and the consumer? The Wire breaks it down.
The government would do well to avoid hyping GST as India’s new midnight “tryst with destiny” and instead focus on its design and implementation, without which the biggest tax reform could turn into the biggest nightmare for the country’s economy.
The GST will come into effect on July 1.
In an overhaul of the entire tax system, there are bound to be several hurdles to its smooth transition and implementation.
Most of the outreach efforts of the finance ministry to explain and create awareness about the GST have been with the bigger industry players.