GST – the Good and Simple Tax, as our acronym-lover Prime Minister touted during the launch on June 30 is finally a reality after almost 11 years of intense labour. This along with FDI in retail must count among the most awaited reforms in India by India observers.

So, the advent of a single tax, which subsumes, at last count, some 17 different taxes and myriad cesses, certainly must count as the single largest tax reform undertaken in India. Not to forget the application of tax only on value added in the chain. Along with this simplification, the fact that goods from one state can pass through different states without wait, harassment and accompanying corruption portend a new beginning for trade in our country. In the pre-GST era, logistics and warehousing strategy of companies have been dictated by tax compliance rather than supply chain considerations. In the sense, the number of warehouses and their size would be driven by billing point concerns rather than geographical spread of demand. In the GST era, warehousing will depend on supply and demand equations and not taxation points. And hence like in most developed countries, companies will get to run larger, integrated and fewer warehouses. Development of more efficient logistics hubs, warehouse consolidation and ensuing FDI will become a reality soon. This is a new dawn for retail, supply chain and logistics industry.

So with all the seemingly obvious benefits of the GST regime, why is it that there is still some cynicism and negativity from different quarters about the move? Why is P. Chidambaram, once the prime mover of GST when UPA was in power, cautioning all of us to “Get Set for Turbulence”? The GST in the current form is nowhere close to the one which was originally conceived. Rolling stones probably gather no moss. But a rolling GST gathered a whole lot of moss on its way from the wisdom of empowered committees to standing committees to GST council. The current version of GST is a product of what I call “co-operative federal bullying”. The result is instead of the One Nation, One Market, One Tax premise, what we have is One Nation, One Market, One Tax name, 3 Sub-Tax names, Multiple Rates, Few Exceptions, Some flexibilities and with an asterisk for conditions apply.

Being part of the GST council, the states in their own wisdom ensured we as a country don’t get away with a simplistic tax which may throw many chartered accountants out of their jobs.  I understand that without having a set of different GST rates (in some cases different rates for the same category as per user segments) or without excluding items like petrol, alcohol and real estate etc., consensus could never have been built in getting GST off the ground.

UPA’s failure to make GST a reality during their regime stems from this. So the choice before the Centre was to accept what the states demand and bring about a not so ideal GST or wait endlessly for a few more years, may be decades, before some major economic crisis forces all concerned to come to an agreement on the ideal GST. From that point of view, I agree with the stand taken by the government to bring in GST in its present form with its shortcomings, with the hope of ringing in the changes in the coming years.

The Congress, which at every opportunity reminded us that the seeds for GST in India, were sown by the UPA, however, chose to be petulance personified and boycotted the GST launch. While rubbishing the GST in its present form its main “anGST” against GST was that it is being rushed through and should be delayed by 3 months till September. We all in India know that in our country whatever may be the preparatory time available, things get accomplished at the last minute. If we get more time, we stretch our deadlines accordingly. That if we have more time, we will be more prepared and can do trial runs before actual roll out,.. exists only in theory. We all know that in our Indian weddings, we keep tying up some loose ends literally till the baraat arrives and continue to do so as the wedding is in progress! Finally, the wedding happens and its smiles all over.  So even after the GST rollout, there will be glitches, teething problems and surprises which I am sure we will find ways and means of getting over. Pushing back by another 3 months is not going to be any different.

It must be commended that the government stuck to the launch date of July 1. It would have been very easy for the PM and the government to throw in the towel and put off the launch by a few months. But then, there are other implications. Come October, it is the peak festival and hence business season in India. Does it help if the rollout happens when India is in the midst of its biggest annual economic cycle? Will it help if GST is launched in January in the final quarter of the fiscal year?

The governing party, the BJP, counts traders as its important traditional base. That the party has decided to go ahead with the tax reform which professes maximum disruptions for this group is a significantly courageous move. In India, economic reforms have always been carried out under duress; when push comes to shove. The heralding of GST must be the 1^st major economic reform pushed when not under any kind of stress but just to ease up things for the future. This conjures up the arrival of Acche Din for our country.

Still our penchant for complicating things come to the fore here as well. Though the GST collections have to be shared between the state and the Centre, could it not have been done at the back using technology rather than coming with three variants like SGST, CGST and IGST? Does the anti-profiteering clause make sense? Will not competitive economics eventually drive pricing?

GST may indeed be a Good and Simple Tax. So there is nothing like a good or better time to introduce the same. But, we should not forget that this is India and we are Indians. So, conditions apply.

The author can be contacted on Twitter @anandkumarrs.