GST: Focus on the tech it rides on–Economic Times–21.03.2017

Human society functions on the basis of mastery of assorted technologies. When you buy rice or vegetables, you take mastery over cooking technologies for granted. An importer or an exporter takes ocean-going liners and containerised cargo for granted. When we make a call on a mobile phone, we take the underlying technologies for granted. The goods and services tax (GST) takes ubiquitous broadband access for granted, in a similar fashion.

Yet, this assumption that every economic agent who has to comply with the tax will have ready access to broadband in every part of the country remains sweeping and unrealistic. The government must focus on making that assumption realistic, in every par t of the country.

If you sell something, you must upload the invoice to the GST Network (GSTN), so that the buyer can claim credit on the tax you have collected and paid the government. Suppose that you are unable to upload your sale invoice and pay the tax you have collected because you are in a part of the country where the telecom network is patchy or has been ordered shut for security reasons. Your buyer would not be able to claim input tax credit.

This is a hassle for the buyer. He might decide to eliminate the hassle by switching sourcing to locations where sellers have no difficulty uploading documents to GSTN. You would end up a victim, felled by unrealistic assumption about ubiquitous technological availability. You would channel your ire to the government. The government would suffer loss in popularity, arising from facile assumptions about the reach of communications infrastructure. But there is a way out.

Identify the patches where data connectivity is still weak. Identify problems: missing towers for last-mile connectivity, inadequate fibre-optic backhaul, hostile terrain. Identify solutions: build the towers, deploy microwave links or satellite connections for backhaul.

Use money from the Universal Service Obligation Fund. Fix responsibility on public officials and private firms, in consultation with them. Put the infrastructure in place and working, before the tax rolls out in earnest in September.

This piece appeared as an editorial opinion in the print edition of The Economic Times.
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via GST: Focus on the tech it rides on

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