India is on the verge of creating history. With the Lok Sabha signing off on the last batch of bills on the goods and services tax (GST), India is just a step away from rolling out an indirect tax regime that will for the first time economically unify the country. Not only is this a game-changing tax reform initiative, it also puts in place a template for cooperative federalism because the states, thanks to the creation of the GST council, are as much a stakeholder as the Centre.The rollout has been made possible after the states and the centre agreed to merge their existing taxation powers to evolve a uniform tax structure. Since these bills were tabled as money bills, the Rajya Sabha can only make recommendations on the proposed laws and that too within 14 days of the bills being sent to the upper house. This means the government will be able to push through these bills in Parliament before the end of the ongoing budget session on 12 April. To be sure, the state legislatures will also have to give their nod to the state GST bill to facilitate a pan-India rollout of the tax from 1 July. The GST Council is expected to finalize nine sets of rules including those on valuation and the transition towards GST in its next meeting on 31 March. It will also start the process of fitting various goods and services into the four slabs–5%, 12%, 18% and 28% — over April and May. The GST Network, the information technology backbone, is also in the process of testing its software and hardware and will open it up for limited trial runs over the next couple of months. The government has also constituted 10 working groups to look into industry-specific issues to ensure a smooth transition.

(Live Mint)