The ABCs Of India's GST

A new consumer tax promises to simplify business.

- Unni Krishnan and Jeanette Rodrigues

IT’S BEEN a decade-long wait, but India will soon have a national sales tax to replace the jumble of state levies that inhibit commerce. The goods-and- services tax, or GST, will go a long way towards fulfilling Prime Minister Narendra Modi’s pledge to make it easier to do business in the world’s seventh-largest economy. The single tax will help combat evasion, boosting revenue for the government, which is grappling with Asia’s widest budget deficit. It should also help fund investment in public infrastructure, including schools and roads, which could shore up India’s competitiveness longer term. The government is seeking to implement the tax in the fiscal year beginning April 1, 2017, but many details still need to be worked out. Here are answers to some questions businesses may have about the new levy.

What’s so good about a new tax?