India’s GST Implementation Gathers Pace
I’ve watched India’s GST debacle from the bitter beginning, and had formed the belief that, after year upon year of broken promises, the tax would never see the light of day. However, now, I’ve been pleasantly surprised by the uncharacteristic speed with which some of the final, essential steps needed to implement this long-awaited tax reform have been taken.
The Rajya Sabha’s landmark vote in favor of the tax took place in August, and by early September more than half of India’s states had ratified the constitutional amendment bill, removing a major roadblock to the introduction of GST. By the end of the month, the GST Council had been formed and already resolved the tricky question of the GST registration threshold. The digital framework underpinning the new tax is already well advanced, and there is the very real prospect that GST could be in place by April 2017 after countless false starts.
That is, if lawmakers can agree on the four-tier GST rate structure, which will surely add much needless complexity to a law intended to simplify India’s indirect tax system. I suppose a four-rate GST still represents a vast improvement on the existing hodge-podge of inefficient and cascading indirect taxes, and with so many stakeholders to please, the GST Council was always going to struggle to find a single rate that would please everybody. But I’d hate to see all the good work of recent months unravel at the final hurdle.
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