The reforms are a paradigm shift in India’s approach to economic governance. The system is simple enough for a small shopkeeper, yet sophisticated enough to power a $5 trillion economy.
The root cause of GST’s complexity lies in the multiplicity of rates. Time and again, experts recommended a simple dual-rate system. They were all ignored.
An op-ed in South China Morning Post also lists 4 major issues, besides border, that obstruct India-China’s relationship & reflects on how the 2 nations can 'improve mutual understanding'.
Issue of GST on food items is in news again after hotel owner’s viral interaction with Finance Minister Sitharaman last week. But complexities highlighted go back further in time.
GST council in its 54th meeting exempted universities, research centres governed by central or state govt, or those exempted from Income Tax, from paying GST on research grants.
Layers of complexity due to multiple tax rates result in similar products being taxed differently. There should be a phased move towards a low single rate to reduce incentive for evasion.
Finance Minister Sitharaman announces decision taken at GST Council meet, adds cancer drugs, medicines for rare diseases and food products for special medical purposes exempt from GST.
Union finance minister Sitharaman says govt cleared 90% GST compensation owed to states & only ‘5-8%’ is held back subject to authentication certificates issued by auditor general.
DMK govt accuses Centre of withholding funds, tightening borrowing, unilateral deductions from state accounts. Says Centre's accounting & funding decisions have 'artificially inflated' debt burden.
This is the game every nation is now learning to play. Some are finding new allies or seeing value among nations where they’d seen marginal interest. The starkest example is India & Europe.
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