Centre Considers Major Overhaul Of GST Structure: Report. Details Here
Recent meetings at the highest levels of government have focused on making the tax regime more streamlined and efficient. This renewed push for GST rationalisation comes at a crucial time
The central government has started high-level discussions on a significant revamp of the Goods and Services Tax (GST) framework aimed at simplifying the system and restructuring the rate slabs, according to The Economic Times report, citing senior officials.
Recent meetings at the highest levels of government have focused on making the tax regime more streamlined and efficient. This renewed push for GST rationalisation comes at a crucial time, as India finalises a trade deal with the UK and nears one with the US, moves that require a competitive domestic tax framework to avoid disadvantaging local industries.
As the GST system, which established a unified national market for goods and services, approaches its eighth anniversary in July, the government is taking a broader view of necessary reforms. This effort follows the introduction of a comprehensive income tax simplification bill in Parliament earlier this year.
"GST is a key focus area," an official said, noting that the goal is to address both structural and implementation-related pain points. Another official emphasised that incremental adjustments are no longer sufficient and that substantial changes are needed to improve efficiency and fairness, states the report.
"Tax collections have stabilised and with the compensation cess about to end, it is an opportune time to take a call on the broad structure of the tax. The exercise should be meaningful to make some difference at the ground level,” said a person familiar with the development in the ET report.
Current Slab Structure And Concerns
Deliberations are primarily focused on the current slab structure and various concerns raised by industry stakeholders over time. Businesses and tax experts have long advocated for a simplified three-slab system, more user-friendly compliance procedures, and streamlined enforcement mechanisms. They have also criticized overly aggressive field operations and the complexity arising from joint administration by central and state authorities.
"Competitiveness of India Inc is crucial and the government is looking at areas to further ease of doing business so that industry can take real advantage of these agreements," said a third official in the report. He added that numerous new initiatives are also being considered in the renewed structure.
The GST Council, the apex decision-making body for indirect tax matters, had constituted a ministerial panel in September 2021 to examine rationalisation proposals. However, progress has been slow due to differing opinions on potential reforms.
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