These outcomes are contrary to the vision set out at the time GST was unveiled, which had envisaged transparent rules and classifications, easier book-keeping and compliance burdens, cheaper goods and services for consumers and a boost to consumption from increased demand.
Then, if one goes by the examples of countries where GST rollouts have been successful, there are usually three rates – a lower rate for essential goods, a mean rate and a higher rate for luxury or sin goods.
That is the way India, too, must go. But the existing situation is, perhaps, understandable given the fact that decisions at the GST Council are usually taken by consensus. With so many different political parties in power in India’s 28 states and eight Union Territories, it is difficult to forge a consensus, especially as no government wants to risk the possibility of lower revenue collections as a result of lower tax rates.