Smooth rollout of Goods and Service Tax (GST) calls for a change in tax collector mentality favouring a willingness to share related information.
Collectors' mentality in one agency has generally been seen to impede sharing of information with a peer agency, according to Mr R. Mohan, an officer in the Indian Revenue Service and a researcher in public finance.
POSSESSIVE HOLD
Mr Mohan said this while speaking to Business Line on the sidelines of a national seminar on ‘Goods and services taxation in India: Fiscal and Constitutional issues' organised here by the Gulati Institute for Finance and Taxation (Gift) here recently.
Tax collector of an agency is very possessive about the information he or she gathers and deals with.
It would require considerable persuasive tactics to prevail on him/her with the need to share information with others.
With Centre and States concurrently taxing on same base, this mentality needs to change or per force will, Mr Mohan said.
“Signs of such sharing are available even now, but have been slow to register”.
UNIQUE MODEL
The GST model being proposed for the country is unique if only because of the very nature of its federal polity — socially, culturally and economically diverse.
The diverse nature is also exemplified by the varying fiscal capacities of States, comparable differences in tax effort and traders' attitudes.
The States also differ in their individual capacity to attract a fare share of Central expenditure, varying income inequality measures and in terms of relative impact from devolution of taxes and grants.
Mr Mohan sought to compliment the Gift for having brought the issue of GST and fiscal relations between the Centre and States into the public domain.
WELCOME CHANGE
This is a welcome change in the context of the fact that not many discussions have taken place on the issue even as fiscal powers have tended to get centralised more and more towards New Delhi.
Mr Mohan also recalled how the Punchi Commission report on Centre-State relations failed to trigger such public debates unlike the Sarkaria report wherein States vehemently argued for restructuring the relations.
The Proposed GST with all its positive aspects seeks to give Constitutional sanctity to fiscal unitarism.
But the Value-Added Tax (VAT) regime had sought to institutionalise fiscal unitarism thanks to the suasive powers of the Empowered Committee.
“Now the rate harmonisation may get Constitutional sanction through the mechanism of GST Council conceived in the 115th Constitutional amendment,” Mr Mohan said.