Tags:
Journalism of Courage
News emerged from a meeting of the empowered group of state finance ministers with senior officials of the Union finance ministry that some form of consensus on the subject of the rollout of the goods and services tax or the GST is emerging. The consensus is that two rates of taxation should be applied: one a standard rate for most commodities; and the other,lower rate set aside for essential commodities. There is,justifiably,concern that this new idea will essentially gut the idea behind the GST,which was revolutionary in scope.
The reasons behind this compromise are clearly discernable. What is being looked for is a method to ensure that the transition from the present sales tax regime to the uniform regime envisaged under plans for the GST doesnt adversely impact the revenue collection of cash-strapped state governments. This is a political argument to which all those who value Indias federal polity cannot help but be partly sympathetic. But on this occasion the argument has less traction than otherwise.
inter-state transfers countrywide. But a two-tier GST is simply a contradiction in terms. Worst of all,it will leave the door open to politics: who is to say what items are essential? Will that be determined on the basis of political bargaining between regional blocs at the Centre? The GST revolution is already hampered by the fact that services are being treated differently. That is a major,major problem and one caused by political compromise. There is simply no space for further compromises.
