South Asia and Beyond

The Return of Babu Raj

Little under a fortnight ago, the Goods and Services Tax (GST) Council, the apex body guiding India’s marquee tax reform, held its 50th meeting. It took place just after the country celebrated the sixth anniversary of the rollout of the GST, which for the first time economically unified the country.
However, some of the decisions taken at the meeting have stoked disquiet among taxpayers—especially businesses. Because they reaffirm a growing trend that the emphasis of GST is shifting from the idea of efficiency.
In question is the move to lower the levy on food and beverages sold at cinema halls to 5 percent. There is a catch through. If you purchased them online as a package along with the cinema tickets, then it would attract the much higher rate of 18 percent.
This confusing move smacks of micro-management. Very similar to what prevailed during the Licence Raj era when Babus ran riot.
Will this roil the ease of running a business? Will Indian investors vote with their feet and flee abroad, like some family businesses have done?
To answer this and more we spoke to Rameesh Kailasam, CEO, IndiaTech, a lobby group for Indian tech firms.

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