Letters: A historic reform

It is inevitable that design of any tax structure is influenced by perception of political masters

The Business Standard edition of July 3 carries several stories and articles on the goods and services (GST). The central theme differs from eulogising GST for its simplicity to calling it a terrorist law. The reader is informed of the never-tiring revenue secretary taking to Twitter to bust the “myths” about the new tax regime. 

In the Q&A the soft-spoken Central Board of Excise and Customs chairman answers the most worrying questions on GST. Some eminent columnists lament upon the lost opportunity by focussing on the critical inadequacies in the GST structure that have robbed it from acquiring the status of an ideal tax reform.

Be that as it may, there is no denying that GST, in whatever form it has emerged, is a historic reform. True, the structure does not match with the precedents across nations which have benefitted from GST or VAT. However, one has to remember that any reform, particularly one of such a huge dimension, is mainly a political exercise and not solely an economic thesis. 

It is inevitable that the design of any tax structure is influenced by the perception of the political masters of the day. Otherwise, does it look convincing that biscuits are taxed at 28 per cent and mobile phones at 12 per cent? Nevertheless, this is only the beginning. In due course, compelled experience of implementation and the need of much greater efficiency (and benefitting from the wisdom of critics!), the GST structure would acquire the expected lustre.

T R Rustagi , New Delhi

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