India's GST system unlikely to see smooth rollout

THE much-lauded, if controversial, Goods and Services Tax (GST) was finally launched by India on the midnight of June 30/July 1, 2017, to replace 17 state and central taxes with "one tax for one country". It was widely greeted by business leaders, who enthused that "India will awake as a common market for the first time", adding that "to do the obvious is often the most difficult" and "life will become simpler with the GST". But, they added, the transition will have to be managed well.

Business leaders called it a "win-win" situation, echoing the government spokesman who claimed it is a "technological marvel, as well as a fiscal marvel", but the revenue secretary at the Finance Ministry also said rules would be issued "soon" to deter unscrupulous businesses from exploiting the tax reform to gouge customers.

Though big business was largely satisfied with the GST, smaller businesses, especially traders, weren't. Many of them were afraid that the tax reform could turn out to be a nightmare for the economy. Traders from around the country went on strike in protest on apprehensions that they would be hit. The varying tax rates, the excessive documentation, and fears of the design and implementation make them worry how it would affect their livelihoods.