Work In Progress

Business Standard     28th October 2021     Save    
QEP Pocket Notes

Context: The GST was necessarily imperfect, which now needs to be addressed.

GST reforms: An overview of potential reforms in GST

  • Rates have to be simplified and raised: In line with the original desire to increase compliance and revenue.
  • Simple, single-rate GSTs have been far more efficient and productive.
  • Add petroleum products in GST: Proper modelling of revenue-neutral single rate would be effective once petroleum is included in GST net.
  • Make GST simpler for taxpayers: Current complex system should ideally be replaced by a straightforward negative list, with tax being claimable against all other inputs.
    • It would increase compliance and reduce burden on tax authorities to check evasion.
  • Push for digitalisation of high-value transactions: Including through invoicing, ways should be discovered to reduce duplication in recording of such transactions in the system.
  • Dual state/Union architecture of GST should have a sunset period, after which it is replaced by a single portal with a single login for all enterprises registered under the GST Network.
  • Address federal concerns: Union government will have to be more generous to its federal partners like in matters such as sharing of revenue from fuel and compensating states for revenue shortfall.
    
QEP Pocket Notes