After a decade of negotiation, horse trading and discussion, India’s GST appears set to simplify its mind-bendingly complex system of internal tariffs and duties.
As Rahual Gautam of Sheela foam explained, in Australia every day a truck leaves Melbourne at 7pm, and arrives 800km away in Sydney at 7am the next morning. “In India, a distance of 800 km could take three or four days by road,” he said.
“The truck is trying to negotiate the infrastructure and internal state border barriers, and fees have to be paid at each checkpoint. Every city, every state has barriers, and goods stay at the borders for hours.”
Simplifying this by abolishing a number of tariffs and bundling them into one, could lead to 1-2% being added to GDP, he believes. ”My guess is that it will be bigger than that.”
Like VAT in the EU, GST is a clear, comparatively straightforward way of taxing manufactured products “It will be based on transactions,” said Sylvian Huguenard, vice president for functional materials and crop protection at BASF. “It will…