This refers to the editorial, “For a unified tax regime” (August 5). The Goods and Services Tax (GST) Bill is a landmark legislation that can transform the Indian tax structure by subsuming all indirect taxes and unifying the country as a single market. It can not only help improve governance and strengthen tax institutions, but can impart buoyancy to the tax base. However, by scrapping the demand for one per cent additional tax on the supply of goods and taking upon itself the obligation to compensate States for potential revenue losses for a period of five years, the Government has posed the risk of a moral hazard. The Congress' demand for a judicial appellate body for dispute arbitration arising due to ‘destination-based’ nature of the tax remains unfulfilled.
The impact of GST cannot be realised fully unless a robust communication and logistics infrastructure is in place. It is imperative for the Government to remove systemic bottlenecks and address the issue of States’ fiscal autonomy for making the implementation of GST successful.