The goods and services tax is still a work in progress

Spirit of give and take must continue in operationalising the new tax regime

The Lok Sabha has duly given its assent to necessary Central legislation to operationalise the Goods and Services Tax, nearly 17 years after the government began discussions on the prospects for a unified indirect tax regime across the country. It is eyeing a July 1 roll-out for the GST, which will replace the multiple Central and state-level taxes and levies that make doing business in India a compliance nightmare today. The GST Council has managed to thrash out a consensus on several issues relating to the administration and the legislative provisions for the new tax system within six months.

For Indian businesses that have been seeking the reform, it is now time to come to terms with the fine print and embrace the tax system. The GST Council, meeting again on Friday to clear four pending sets of regulations, must sign off on which of the five GST rates will apply to different products and services. Clarity on the applicable rates will help industry alter their accounting systems, supply chains and pricing strategies. On several other fronts, the final laws haven’t changed much from their draft versions, despite industry red-flagging several provisions. For the services sector, in particular, compliance requirements could go up multi-fold. It is still not too late for the GST Council to offer some exemptions or resist operationalising some of these provisions through the subordinate rules and regulations in order to address genuine industry grievances.