Sumit Dutt Majumder: GST: Breakthrough, but bumpy road ahead

Further, the idea of a Dispute Settlement Authority (DSA) would be shelved now. The GST Council would be empowered to decide about disputes. However, it would be difficult for the GST Council to handle the inter-state or Centre-state disputes on GST, which in course of time, are likely to increase exponentially. The Council would have to set up a forum for resolving such disputes. Further, the Centre has agreed to set a floor rate for the tax with a narrow band within which the States will retain the right to vary the Sate GST (SGST). Different SGST rates at different states will complicate input tax credit scheme, and it might also encourage cross-shopping. True, more than 50% of the countries administering VAT/GST, including countries in European Union do have multiple rates. But they are also facing difficulty, the worst case being that of Brazil. If we opt for multiple rates of SGST in different states, the scheme of Integrated GST (IGST) for inter-state movement of goods will have to be reworked carefully.