Letters: How did it happen?

This refers to the report, "One nation, one tax gets going", (4 August). In its concluding observations, the Committee headed by the Chief Economic Adviser Arvind Subramanian on possible tax rates under GST, described the tax as a game-changing reform that would facilitate "Make in India by Making One India".

The passage of the Constitution amendment Bill in the upper House, where it is outnumbered by the Opposition, is indeed a huge moment for the Narendra Modi government. It shows that prolonged logjams and obstructionist theatrics of the Opposition in Parliament could not "resist the idea whose time has come".

The GST is a landmark legislation that can potentially transform the Indian tax structure by subsuming all indirect taxes and unifying the country as a single market. It can not only help improve governance and strengthen tax institutions but also impart buoyancy to the tax base.

However, by scrapping the demand for one per cent additional tax on the supply of goods and taking upon itself the obligation to compensate states for potential revenue losses for a period of five years, the government has posed the risk of a moral hazard.

Shreyans Jain, New Delhi

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