04 JUL,2022 | MEDC
It is now five years since GST officially came into effect in India. At this point, it is fair to say that despite the system performing reasonably well, there still remain some structural glitches needing to be addressed. They pertain mainly to the multiplicity of rates and compliance issues. Even though the changes at the just-concluded GST Council meeting may generate revenue of up to Rs 15,000 crore annually, we must realize that GST is more than just a tax reform … it is essentially a tool for the socioeconomic reengineering of our entire financial system. Most incremental revenue now will probably come from direct tax reform. We need to viewthe inclusion of items and tweaking of rates in GST from a macro perspective. Policymakers should examine whether GST reforms over the past five years have genuinely benefited the smaller players in Indian industry. This levy has also created a rather taxing environment for Centre-State relationships, and future versions of the GST should attempt to rectify it.
*Pic Credit: Google