A Nationwide GST Identification Mandate Can Simplify the Regime

India should relieve businesses operating across the country of the need to comply with multiple sub-national GST systems

- VIJAY KELKAR, ARBIND MODI & RAHUL RENAVIKAR

The goods and services tax (GST), which recently completed eight years in India, was originally envisioned as a "good and simple tax." However, over time, it has become increasingly complex. While a national GST would have been an ideal value-added tax (VAT) system, the imperatives of a federal structure led to a compromise, resulting in a dual GST system comprising Central GST (CGST), State GST (SGST), and Integrated GST (IGST). Under this system, the Centre and state governments have concurrent authority to tax the consumption of goods and services based on the principle of incidence at destination, in contrast with the previous indirect tax regime, which followed an origin-based taxation approach.

While the uniformity of SGST laws across states has reduced compliance complexities compared to the VAT regime, challenges remain. Businesses with a pan-India presence still need multiple SGST registrations and must manage compliance separately for each state, including GST payments and return filings. This fragmented approach retains some of the administrative burdens of the VAT era despite the procedural standardization.