The Goods and Services Tax rollout could be chaotic, owing to ambiguity and last minute changes
The Goods and Services Tax (GST) is being touted as a game changer for India’s economy, one that would usher in one tax across the country, which would help simplify tax filing for companies and traders, ease movement of goods across states and ring in the cash registers for the government, thanks to a wider tax base and increased compliance. But, there is a growing concern that the GST, to be rolled out on July 1, will be as complex as the existing tax system and the rollout could be chaotic, at least in the initial months. That is because several rules and regulations are still being formulated and there is a lack of clarity on some issues.
Countries like Singapore, Canada, Malaysia and Australia already have GST or an equivalent system, but they have only one or two tax slabs. So, in Singapore, whether you are eating out or buying a product or paying for any other service, there is single tax rate. But, India has six tax slabs—no tax or goods exempt, 3 per cent, 5 per cent, 12 per cent, 18 per cent and 28 per cent. Also, there will be additional surcharge on some goods, such as luxury products.
Senior advocate Arvind Datar said instead of moving to a new tax system, the existing one could have been better implemented. “There are multiple restrictions and rigidities. And, in other countries where this has been done, nobody has one-tenth of the procedural complications that we have,” he said.
This story is from the July 02, 2017 edition of THE WEEK.
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This story is from the July 02, 2017 edition of THE WEEK.
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