जीसटी मुळे होणारे फायदे व तोटे — सविस्तर माहितीसाठी इकॉनॉमिक टाइम्स मधील बातमी वाचावी.

So why precisely has the government signed off on this spaghetti tangle of rates? What could be so important that India’s most important tax reform needed to be gutted in its service? Well, the government’s political future, of course.

Unsurprisingly, the government wants all the praise for conducting economic reform without paying any of the cost: that cost being the temporary inflationary bump the new tax is likely to provoke. Across the world, similar bumps in inflation have proven politically disastrous: In many cases, governments that have introduced a GST have been voted out.

India’s government has been more canny, though at considerable cost to economic efficiency. Most components of the consumer price inflation index have been made exempt from the GST altogether, starting with zero taxes on food grains, cereals and milk. India’s top economic bureaucrat even claimed that introducing the GST would lead to a two percentage point drop in the rate of inflation.

That sounds like good news — except, remember, the price index is an artificial construction. The amount the public pays is still likely to rise before the system settles down. It just won’t be reflected in the consumer price index because the GST Council has gerrymandered the tax rates to ensure it doesn’t.

Complying with the tax isn’t going to be much easier, either. In fact, as has been long feared, it may get harder, given that companies may have to submit monthly returns which they won’t get an opportunity to revise. The rules for settling disputes haven’t been ironed out either; many worry that tax authorities may be able to deny you input credits — a crucial part of the GST — just because someone you bought something from takes too long to enter that transaction into the centralized GST database.

via GST: India’s big new reform could create nearly as many problems as it solves. Here’s why – The Economic Times