Appraising the ‘Goods and Service Tax’ as a ‘Means’ (and Not the ‘End’) to Improving the Business Climate of India

The Constitution (One-Hundred and Twenty-Second Amendment) Bill, 2014 currently pending consideration of the Parliament seeks to usher a new indirect tax regime in India purported as the ‘Goods and Service Tax' The avowed intent of this Amendment Bill, in terms of its “Statement of Objects and Reasons” is to “replace a number of indirect taxes being levied by the Union and State Governments and is intended to remove cascading effect of taxes and provide for a common national market for goods and services.” The proposed change is of such wide proportion that it has been described by the incumbent Union Finance Minister as “the single biggest tax reform since independence”, as the earlier reforms on the subject have had limited perspective. This article seeks to revisit the applicable constitutional and legal postulates governing the levy of various indirect taxes in India so as to seek a theoretical as well as pragmatic appraisal of the changes envisaged under GST. The idea is to undertake a legal-commercial examination of the existing and proposed state-of-affairs to draw meaningful lessons as to whether GST aids businesses generally, and positively redraw the business climate of India. This article is divided into the following parts;I. Introduction: Setting the ContextII. Movement to 'GST': A backgrounderIII. What is 'GST'? Why 'GST'?IV. Examining the 'Amendment Bill'V. Assessing the Business impact of 'GST'VI. Issues to be ironed out: Wishlist on 'GST'VII. Conclusion