Ironing Out The GST's Wrinkles

The GST was implemented a year ago amidst much fanfare. The idea was to simplify the complex. Has GST lived up to its promise?

- Minhaz Merchant

ALBERT EINSTEIN OFTEN SAID the clever simplify the complex while the rest complicate the simple. The Goods and Services Tax (GST) was implemented one year ago amidst much fanfare at a midnight gathering of the country’s leaders in the central hall of parliament. The objective was to collapse multiple state and central taxes into one broad-based nationwide tax. The Goods and Services Tax would therefore subsume VAT, service tax, excise and CST. The idea was to simplify the complex.

Has GST lived up to its promise? The first year of such an overarching tax reform is bound to undergo teething problems, especially in a fractious democracy like India, where regional satraps fiercely guard their states’ tax revenue. The fact that the government was able to get all states and union territories on board was itself a significant achievement. But the hidden hand of the bureaucrat which determines the devils in the detail has complicated what should have been a clean, simple GST regime. Einstein would not have been pleased.

Most truckers though are a happy lot these days. PostGST, their travel time across inter-state borders has fallen by over 25 per cent. Transporters are saving fuel. Drivers are saving money. Before GST was introduced, they would wait for hours at state check points. One driver said he once sat, ate and slept in his truck for 36 hours at a state border post. Now the checkpoints have gone. The need to bribe officials is over. But there is one niggle: flying squads of RTO inspectors who extract their pound of flesh. Overall though, GST has been a boon for the transport and logistics sector. As smaller towns assume greater importance in India’s economy, the sector will become a key driver of GDP growth.

At the checkposts