Structural changes to GST

24 APR,2022 | MEDC


 

The GST system needs careful tweaking to maximize its effectiveness. The need of the hour is not just revenue collection, but stability and simplification of the system. That will necessitate structural changes to GST including moving to the revenue neutral rate at the earliest. Additionally, the number of slabs should be reduced as having a large number of slabs opens up unnecessary complications and opportunities for lobbying, and thus, for perceptions of unfairness. The GST Council should also focus on improving the user-friendliness of the fiscal system to enhance compliance. It is necessary to improve the ease of claiming credits and filing returns to enhance the overall ease of doing business in the economy. It is essential – at both state and central levels – that the GST system rapidly improves its performance to its claimed potential. As time passes, it is imperative to address some of the structural flaws of GST, and introduce suitable reforms to streamline it and turn it into a net-revenue generator for the economy.

*Picture Credit: Google

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