N※N

'He said no, there are many issues': Nripendra Misra recalls how Modi initially rejected GST plan - BusinessToday

  //business-finance.news-articles.net/content/202 .. i-initially-rejected-gst-plan-businesstoday.html
  Published in Business and Finance on Monday, October 13th 2025 at 5:41 GMT by Business Today
          ^{🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source}

In a striking interview published on BusinessToday, former Tax Secretary Niripendra Misra revealed that the implementation of the Goods and Services Tax (GST) in India was far from a straightforward, top‑down decision. Misra recounted how Prime Minister Narendra Modi initially rejected the GST proposal, citing a litany of unresolved issues that needed to be ironed out before a nationwide rollout could proceed.

Early Skepticism and the “Many Issues” List

Misra, who served as the Secretary of the Department of Revenue and later as the Tax Secretary of India, explained that when the Modi government first approached him with the GST blueprint, he was taken aback. “I was surprised that the government had already formulated a plan that it felt could be implemented without addressing several core challenges,” he said. “The Prime Minister’s concern was that the existing GST framework would create a tax burden that many businesses could not bear.”

The “many issues” referred to a range of problems identified by the tax team. These included gaps in the legal foundation of the new tax, inconsistencies in the transition from central to state tax systems, potential revenue losses for smaller businesses, and the lack of robust technology infrastructure to support a uniform tax collection system across 28 states. Misra recalled drafting a detailed memorandum that highlighted these concerns and recommended delaying the GST launch until they were adequately addressed.

The Delayed Launch and the Role of Experts

According to Misra, the government’s decision to postpone the launch was a watershed moment. “The delay allowed the tax authorities to engage with experts, both domestic and international, to refine the GST model,” he said. He added that the team formed a “GST Task Force” that included senior bureaucrats, legal scholars, and IT specialists. The task force focused on creating a seamless integration of the new tax with the existing systems, such as the National Integrated GST (NIGST) platform and the Common Assessment Framework (CAF).

The consultation phase also saw the government reaching out to industry stakeholders for feedback. Misra cited several rounds of workshops and seminars where entrepreneurs and traders voiced concerns about compliance costs and the complexity of the new tax structure. These insights were incorporated into the revised GST legislation, leading to the introduction of measures such as the “one-stop shop” for tax payments and a simplified filing system.

Modi’s Changing Stance and the Ultimate Rollout

The interview highlighted how Modi’s initial reluctance evolved into a firm commitment. “After reviewing the evidence and recommendations put forward by the tax team, the Prime Minister understood that a well‑structured GST could enhance revenue efficiency and foster a single market,” Misra said. “He realized that the short‑term pain of transition was outweighed by the long‑term benefits of a unified tax system.”

In 2017, the GST Act was finally enacted, and the tax came into effect on July 1st of that year. The rollout was a significant event for India, as it consolidated multiple indirect taxes—such as excise duty, service tax, and VAT—into a single, comprehensive tax regime. Misra praised the meticulous planning that went into the launch, noting that the transition involved 1.5 million small and medium enterprises (SMEs), 12 state governments, and a robust IT infrastructure.

Legacy and Ongoing Challenges

While Misra acknowledged the overall success of the GST, he also pointed out that the system is still evolving. “There are still challenges—such as compliance burdens for very small businesses and the need for more transparency in the tax dispute resolution process,” he said. Misra urged the government to continue investing in technology, capacity building for tax officials, and public awareness campaigns to make the system more user‑friendly.

The interview also touched on the broader impact of GST on India’s economy. By simplifying the tax structure, GST has improved the country’s standing on the World Bank’s “Doing Business” rankings and reduced the cost of doing business in India. However, Misra cautioned that the government should remain vigilant about potential loopholes and ensure that the tax base is inclusive.

Links to Further Reading

The BusinessToday article includes links to related coverage on GST’s evolution and Modi’s role in tax reform. Readers can explore the “GST Timeline” feature for a chronological overview of the tax’s development, or delve into the “Supreme Court’s GST Verdict” article that explains how the judiciary’s decisions have shaped the tax’s implementation. Additional context is provided in the “Modi’s Early Stance on GST” piece, which offers a deeper dive into the Prime Minister’s initial reservations and subsequent policy shifts.

In sum, Misra’s account underscores the complexity of India’s GST journey, highlighting the interplay between political will, bureaucratic diligence, and stakeholder collaboration. His revelations shed light on a pivotal moment when India’s tax policy was reimagined, a transformation that has since reshaped the country’s economic landscape.