24 FEB,2020 | MEDC
GST is a landmark policy reform with huge innate potential. This levy is not progressive in nature, but it is necessary to expand the tax base which is abysmally low for a country of our size. However, much more simplification and rationalization needs to be undertaken. Multiple rates combined with multiple registrations have complicated the GST. The MSME sector, in particular, is struggling to cope with the system. This complexity crates an incentive to stay out of the tax net, with the net result that GST collections have consistently underperformed. That defeats the very purpose of its introduction. Development of a simpler structure – with just three or four rates – is the need of the hour. Doors should be closed to the loopholes that facilitate evasion. The GST is a much-needed platform for enhancing the ease of doing business in the economy, and it will be a pity if it is hijacked by vested interests.
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