The good news is that India could still have a unified goods and services tax on 1 April 2011. The bad news is that it really won’t be all that unified. And the really bad news is that there is a chance that this deadline could be missed.
The new tax regime is complex, not simple as was originally envisaged. And it will still have exemptions, exceptions and special cases—all things that should make the state governments, which were chary of losing revenue under the new regime, happy.
Finance minister Pranab Mukherjee is a pragmatic man and in that spirit, he has, in return for giving in to the states on several aspects, sought to stay firm on the issue of discretionary taxation powers.
The new tax regime will require states to relinquish these and the minister continues to insist that they should. And that, at the end of it all, is the really good news.