Some good work by GST Council, some bad

The Goods and Services Tax (GST) Council has done well to clear a simple filing system for businesses to claim input tax credit. Phasing in filing a single monthly return for all taxpayers, except composition dealers and dealers filing nil returns, who would file a quarterly return, makes eminent sense. Ditto for mandating only B2B dealers to file invoice-wise returns of outward supplies. A simplified, non-obtrusive and administratively efficient system of matching returns and invoices will make compliance easy. The resulting audit trails of value addition across the income and production chain will curb evasion, and shore up collections.

The decision to make the GST Network (GSTN) wholly government-owned is strange. Non-government entities had been given 51% ownership of this company that runs the information technology infrastructure because state ownership comes with cumbersome rules and procedures that would impede swift decisionmaking and action, essential if the infrastructure is to run flawlessly all the time. Has the government taken action, no doubt desirable, to make all state-owned enterprises as nimble as private sector ones, in hiring and procurement? If not, how will GSTN ensure functional excellence? Is the government aware that the dematerialised accounts that hold India Inc.’s ownership instruments are housed in non-state entities? Do our politicians want to tell the outside world that it should not trust India’s IT giants with its sensitive data—after all, these are non-state entities?

The proposal for a sugar cess is absurd and surrender before populist pressure. The way to end farmer distress is to implement the Rangarajan committee’s recommendation to pay farmers a price that varies in direct proportion to the sugar industry’s profits.

This piece appeared as an editorial opinion in the print edition of The Economic Times.
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via Some good work by GST Council, some bad

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