I read GST notifications so that normal people do not have to, which is less a boast than an admission that I have made some peculiar life choices. The encouraging news is that the government’s recent attempt to rationalise rates moves the tax in the direction it was always supposed to travel: fewer arbitrary distinctions, less litigation over what an object really is, and more predictability for the person who must actually file the return. The GST Council’s official frequently asked questions explain when the revised rates took effect and how supplies straddling the change should be treated. That sounds dry, but mundane clarity is precisely what Indian tax reform needs. I give the Modi government credit for returning to simplification after years in which GST acquired barnacles—cesses, exceptions, classification disputes and procedural rituals that made the grand phrase “one nation, one tax” sound like advertising copy. Congress critics will naturally pretend that every concession is an admission that GST itself failed. That is unserious. A large federal tax was always going to need correction after contact with India’s economy. The relevant test is whether the system learns. On rates, it finally appears to be learning.
The reform is real, even if the slogan was premature
GST replaced a thicket of central and state levies, checkpoints and cascading taxes. Its critics often compare the system not with what existed before 2017 but with a frictionless tax code imagined on a seminar whiteboard. I have no patience for that trick. The old regime rewarded geographical arbitrage, paperwork armies and informal dealing; trucks lost time at state borders while businesses accumulated taxes embedded within taxes. A common market was a genuine reform, and a BJP government spent political capital delivering it after years of Congress-led drift. Still, supporters should not hide from the original design’s overcomplication. Multiple slabs, compensation cess and fine distinctions between near-identical products created the kind of interpretive industry that consultants love and shopkeepers finance. The official account of the 56th Council meeting’s recommendations shows both the breadth of rate changes and the continuing density of the code. If a citizen needs annexures, explanatory circulars and professional advice to learn the tax on an ordinary purchase, simplification has not yet become a lived experience. My support for GST is exactly why I want its designers to be less defensive about repair.
The best part of rationalisation is not the momentary reduction visible on a television graphic. It is the removal of classification cliffs. A tax system becomes absurd when a small change in ingredients, packaging, hotel tariff or description throws a product into another slab. Businesses then design invoices around the code rather than products around customers. Officers spend time adjudicating vocabulary. Courts are asked whether familiar goods belong to one bureaucratic species or another. None of this raises revenue intelligently. It raises uncertainty, and uncertainty is a tax whose rate is highest for the smallest firm. A large company can retain specialists, seek advance rulings and survive a disputed demand. A family business cannot casually lock up working capital while an appeal crawls. Rate compression therefore has a pro-enterprise virtue that the Left rarely acknowledges: it limits the discretion through which the state can make honest commerce feel presumptively guilty.
Do not confuse lower rates with lower compliance costs
Here is where I part company with triumphalists. A tidier rate chart does not automatically produce a humane tax administration. The owner of a small factory cares about input-credit mismatches, portal behaviour, delayed refunds, notices generated from imperfect data and the cost of reconciling what supplier and buyer reported. These are not glamorous matters for a political rally, but they decide whether GST feels like infrastructure or surveillance. The government’s digital approach has important strengths. Invoice trails discourage evasion, common data enables analysis and electronic filing is preferable to carrying folders between counters. Yet digitisation can merely automate an unreasonable process. When systems assume that every mismatch signals wrongdoing, compliant taxpayers become unpaid investigators of other firms’ filing errors. I would like the Finance Ministry to adopt an explicit principle: low-risk discrepancies should first trigger correction, not intimidation. Technology ought to reduce official suspicion, not distribute it at machine speed.
The appellate architecture matters just as much. Tax law without timely appeal is executive power wearing accountancy spectacles. Businesses need a forum that can settle recurring questions consistently before years of contradictory orders accumulate. The launch and operationalisation of GST appellate mechanisms deserve more attention than another speech about record collections. Revenue is not the sole measure of tax success. A government can collect more because the economy grows, because enforcement improves or because disputes remain unresolved and money stays blocked. The better dashboard would include refund time, age of appeals, number of classification disputes, proportion of notices withdrawn and compliance hours by firm size. I suspect officials resist such measures because they expose the difference between a portal being available and a system being usable. But a reforming government should welcome that exposure. The BJP’s political claim is competent delivery; it should judge the tax bureaucracy by the citizen’s clock.
The opposition’s nostalgia is not an alternative
Congress has every right to attack poor implementation. It does not have the right to edit its own history. The party helped conceive GST, struggled to build agreement and then discovered federal purity only after Narendra Modi delivered the law. Its present rhetoric alternates between claiming parentage when the reform works and describing it as ruin when an election approaches. That is clever messaging, not policy. Nor is the INDIA alliance’s preferred response—more exemptions for every vocal constituency—a route to simplicity. Each exemption creates boundary questions, breaks credit chains and encourages the next lobby to demand equal treatment. A broad base with moderate rates is less theatrical and more defensible. If opposition leaders want credibility, they should publish a coherent slab structure, revenue estimate and transition plan rather than treating every reduced rate as proof that agitation forced enlightenment.
There is also a federal lesson. The GST Council is not Delhi issuing orders to decorative states; it is a negotiating institution in which governments with different parties and revenue profiles bargain over a shared tax. Consensus can be slow and occasionally produces compromise clutter, but it is still one of India’s more serious experiments in cooperative federalism. The commentariat tends to remember this only when a non-BJP finance minister objects. When states agree, the same arrangement is described as central domination. I would prefer more transparency: publish clearer reasoning for rate decisions, model expected revenue effects and disclose major alternatives considered. That would make it harder for every participant to approve a compromise in the room and denounce it outside. Sunlight would also reveal that state governments, including opposition-run ones, often resist reductions because they need revenue while their national leaders promise cheaper everything.
The next reform should be boring—and relentless
My prescription is deliberately unromantic. Continue merging slabs where revenue permits. Prune exemptions. Create binding, time-limited resolution for common classification questions. Make refunds automatic when risk checks are satisfied and compensate taxpayers when the state delays without cause. Give small enterprises a stable, simplified return regime that does not punish growth at the threshold. Measure officers on dispute quality, not merely demands raised. And stop changing forms close to filing deadlines. None of this will produce a cinematic launch, but institutions mature through boring reliability. Indians do not need GST to become a national emotion. They need it to become plumbing: noticed mainly when it fails.
The government deserves credit for recognising that tax reform is a process rather than a sacred tablet delivered in 2017. It should resist the temptation to declare completion. Lower and more coherent rates can boost consumption, reduce evasion incentives and make formalisation less painful, but only if administrative reform follows. My broad verdict is favourable because the direction is right and because the alternative offered by Congress is mostly opportunistic amnesia. My warning is friendly but firm: taxpayers eventually judge a reform at the login screen, the refund queue and the appeal counter. If Delhi wants GST rationalisation to become a durable achievement, it must make the system uneventful. In taxation, boredom is not a lack of ambition. It is the highest form of success.
