Matching economic logic with political realities often creates a Frankenstein that leaves both economists and political scientists nodding their heads in disbelief. The goods and services tax (GST) in India is, unfortunately, turning out to be such an exercise. Service tax, introduced in 1994 and now an important revenue source (given the rapid rise of the service sector) is completely controlled by the centre. The second level of convolution is the complicated “place of supply” provisions on which inter- or intra-state supply hinges. What started as an economic exercise has been reduced to a political spoof.

Source: Mint November 08, 2016 20:25 UTC