Way Forward for GST implementation

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The deadline for GST implementation has been set for April 2016 by the Government. It is a good leadership aspect to keep the target in sight. However achieving the target requires the government to run and win the GST hurdle race. The roadblocks are becoming clearer by the day. To sail over them smoothly there is a strong need to set up the multiple implementation units and monitor their progress. Do you remember the PERT chart and the Critical path Method? It is high time that we have the methodology in place for winning the GST hurdle race.

Following are some of the activities which need to be mapped on the charts with the detailed activity plan and implementation target dates.

Communication

For any transformation like the GST, clear cut communication plays a very important part. By this time an educative series on the GST should have been doing the rounds on the TV. People invited on the forums could be asking questions and getting their queries answered by the experts. This kind of interaction would generate interest and also bring clarity of the GST reform to the common man. By the time the implementation takes place, the people would have understood it and the introduction would be smooth.

IT infrastructure

It is known that the IT will play an important role for the implementation of GST. The goods and service Network GSTN was set up in 2013. It is a non-profit, non-government, private limited company entrusted with the job of providing the IT networking framework and software solution for the smooth roll out of GST. But with the current state of affairs it seems to be very difficult. While some states are in the advanced stage of using the IT infrastructure, there are others who are only midway. The dual nature of the GST bill also requires the states and the Centre to synchronize their databases in line with the GSTN requirement.

Full involvement

The GST rollout would require that all states and eligible UTs are part of the implementation at the same time. We cannot have a situation like the partition of India at the time of independence. There cannot be islands within the country which have not embraced GST and others who are behind schedule.  The very idea of partial implementation would defeat the purpose of the GST. The involvement of the states has to be full without any leeway. The states should come out with their readiness plans for GST implementation two months prior to the April 2016 deadline.

Exceptions

We are building in a number of exceptions into the GST already. The exclusion of alcohol and Petroleum products from GSTand the 1 per cent tax to compensate the interstate CST loss are a few of the exceptions which are going to have a far reaching impact. Somewhere, the basic purpose of the GST is being forgotten. To reiterate, it is to simplify the tax structure and must subsume the multiple tax categories under its fold. We must not in any case end up with a VAT like attempt, which happens to be a GST precursor with a similar purpose.

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