BOOK REVIEW. Demystifying GST

Will GST turn out to be a ‘Good and Simple Tax’ as the Prime Minister defines it? Well, that’s being optimistic. While the transition to a unified Goods and Services Tax is no doubt a watershed reform in India’s hopelessly convoluted and splintered system of indirect taxation, GST in its final form has turned out to be much more complex than originally envisaged. Thanks mainly to the need to coax and cajole recalcitrant States, accommodate special interest groups and contain the inflationary impact on consumers, GST has ended up with three components (Central GST, State GST and Integrated GST) and more than five different tax slabs for both goods and services.

If you’re confounded still and like to understand what GST is, whom and what it seeks to tax, and how a tax system can be hailed a landmark reform, you should read The GST nation: A guide for business transformation (Business Datainfo, ₹695) a book by Ajay Srivastava, an Indian Trade Service officer.

The book is a factual, simply-written ready-reckoner to GST for business owners and practitioners starting from scratch, to understand the architecture and intricacies of the new tax system. The author’s no-frills approach weeds out the legalese from the original Act and presents the changes in a ready-to-consume format. He also illustrates GST’s more convoluted provisions such as those on stock transfers, input tax credit, the filing of returns and the taxation of e-commerce with live examples.

The key concerns that SMEs flag with respect to the GST transition relate to the taxation of stock transfers, the treatment of job work contracts, the presumptive composition scheme, the transitional provisions on stock and the reverse charge mechanism. These get detailed treatment in this book. An entire chapter is devoted to record-keeping requirements under GST. There’s also a live walk-through of how an SME can migrate to the new system.

While it is a good practitioner’s guide, the main shortcoming of the book is that it is quite utilitarian in its approach. The two initial sections explaining the GST’s workings and its potential to transform the nation may engage non-business owners who are merely curious. But beyond this, the author doesn’t attempt to add on the bells and whistles that would make the content interesting to a lay reader. A history of the GST, the stormy passage it has had across different political regimes and a comparison of the Indian attempt at GST to other emerging markets would have made for a contextual read, but don’t feature here.

Also, several of GST rates and even some of its rules have been tweaked by the GST Council after the publication of this book. As the rules continue to be in flux, it would be difficult for a reader to discern which particular sections have changed. An updated addendum from the author on the changes would be useful.

That said, if you are looking for a sound conceptual understanding of GST, the book does complete justice. Why are exports exempt from GST but imports taxed? Why the insistence on a 100-per cent online interface? Why is ‘supply’ a better basis for indirect taxation than manufacture or sale? The author deals with the whys of many GST provisions too, as he demystifies them. Given that most of us pay up our taxes without trying to reason why a provision exists in the first place, this is a good effort.

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