With some progress in the design of the Goods and Services Tax (GST), there is an emerging need to explore the options for administering the new tax regime. From the discussions and decisions taken so far, one of the important parameters of the new regime is the applicability of two taxes (Central GST, CGST, and State GST, SGST) on each and every transaction of supply of good and/or service in the country. The central tax would accrue to the central government and the state tax would accrue to the state governments. Inter-state sales and imports will attract Integrated GST (IGST) and it is likely to be administered by the central government. IGST will comprise of the prevailing SGST and CGST rates for the concerned good and it will work as a mechanism (or clearing house) to transfer input tax credits from the origin state to the destination state. Compared to the existing regime, the proposed tax represents a significant change in the tax administration. The central tax administration would need to deal with wholesale and retail traders in addition to the existing taxpayers (e.g., manufacturers, service providers). Similarly, the state tax departments would need to deal with service providers. The workload per employee as well as the skill set associated with tax administration would have to undergo a sharp change if the taxes are to be administered by maintaining a status quo on the forms of administration. In other words, grafting the new tax on to existing tax administrations would impose a significant cost of transition in addition to the higher costs of collection. On the other hand, there would be quite a sharp change in the tax environment faced by a segment of the taxpayers – all taxpayers other than the manufacturers who had faced one tax and one tax department (e.g., service providers, wholesale and retail traders). Under the new regime potentially they will face two tax departments, and potentially an increase in the compliance cost associated with the new regime, thereby raising the opportunity cost of being in the tax system. The result could either be higher evasion or higher resistance to the new tax regime.