Work In Progress

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.