A major tax reform is generally planned with the following expectations in mind.

First, the revenue target for the new tax must be achieved smoothly. Secondly, the new tax should be easy to understand and easy to comply with by the taxpayers. Thirdly, it should be easy to administer with modern technology.

The above expectations hold good for the Goods and Services Tax (GST) too. GST being a tax to be administered jointly by the Centre and the States, there was a fourth expectation: Cooperative Federalism between the Centre and the States will ensure smooth administering of GST.

Today, on the first day of the fifth year of introduction of GST, it would be good to have a look at where we stand on the foregoing expectations and certain other related issues.

Expectations on Revenue

On revenue targets, it was expected that in the first year of introduction of GST the target may not be achieved because of the teething problems in the initial months. But it was not expected that the technology support for administering the tax would be found inadequate. That happened solely because the tax was introduced without making all the modules of the GST Net, the IT infrastructure, fully operational, after the usual Trial Runs for each of the modules.

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