After being in the making for nearly 17 years, the Goods and Services Tax regime rolled out on the midnight of June 30. Should the ceremony to inaugurate the new indirect tax have evoked the symbolism of the country’s freedom at midnight, or not, is a matter of debate. But there was something undeniably momentous about the Joint Session of Parliament that formally began the process of bringing together the country’s 2 trillion dollar economy and 1.3 billion consumers into a single market.
The boycott by a section of the Opposition — including the Congress, Left Parties, DMK and the Trinamool Congress — did not diminish the occasion. If anything, their argument that the roll-out did not merit a celebration invited questions about these parties’ political judgement.
The Opposition — the Congress, most prominently — had displayed maturity in the deliberations that led to the framing of the GST legislation. The constitutional amendment to introduce the new tax regime, in fact, is an example of the possibilities of consensual law-making in the country — the Rajya Sabha passed the GST Bill without the country’s principal opposition party moving a single amendment.
It was churlish of it, then, to have not seen Friday’s Joint Session of Parliament in the same spirit of bi-partisanship and collaboration. The Opposition would be well-advised to not extend its confrontation to the tax reform itself. Doing so would mean going against the consensus that it had itself helped create.
The sheer scale of the GST makes it one of the most complex tax reforms attempted anywhere in the world. What was launched on Friday midnight may not be the perfect tax regime. There have been protests by small traders, for example, who feel hard done by the tax rates. Business establishments have complained of software glitches.
The government has assured that procedural lapses in the first two months of the new tax regime will not result in penalties. But the Confederation of All India Traders has appealed to it to treat the first nine months of the new tax regime as an interim period during which non-compliance “should not result in penal action”.
The government must treat this appeal with generosity. Even as it expects to transit to the new regime in about three months, it should do well to not lose sight of the fact that no country has implemented a GST regime in such a short time. By all counts, the coming months will be a learning — and a testing — experience for the government, the Opposition and different sectors of the economy. It is imperative that these players do not shut the doors on dialogue.