Though Good and services tax is still in good progress, it needs a further simpler rate structure for better functioning. Explain (200 Words)
Refer - Financial Express
Enrich the answer from other sources, if the question demands.
IAS Parliament 5 years
KEY POINTS
· Nearing three years of the GST in India, rather than tinkering with the existing structure, it is time the GST system was overhauled for efficiency and efficacy.
· The key constituents of the economy—viz. oil & gas, electricity, real estate—have not yet been brought under GST.
· Hence, the cascading effect due to levy of excise duty, VAT, stamp duty, etc, continues to add to overall costs. This needs to change, so that everything (excluding alcohol for human consumption) is taxed under a common statute. The government can frame the input tax credit rules in a way that protects revenue.
· While mobile phones were moved from the 12% slab to the 18% (effective April 1) at the aforesaid GST meeting, decisions on other products (viz. garments, fertilisers, etc) were deferred, pending further deliberation.
· A two-rate GST structure should be put in place, with inputs/raw materials taxed at a lower rate, and finished products taxed at a higher one, thereby completely eliminating any inverted duty structure for business.
· The plethora of exemptions can be pruned to do away with the cascading due to non-availability of ITC.
· With lowered tax rates, compliance is expected to rise, resulting in better tax revenues.
· While its overall 2020 ease of doing business rank has significantly improved to 63rd (out of the 190 countries), the rank for paying taxes is a low 115th. A significant improvement in this can propel India into the top-50 list.
