GST Evolution: Streamlined Tax System on the Horizon

A report by PwC India calls for simplifying GST compliance in India by reducing tax slabs and including petroleum products under GST. Over the past eight years, GST collections have seen significant growth. A streamlined tax system could align India with global trade dynamics and improve investment appeal.

A recent PwC India report has highlighted the need for the GST Council to simplify compliance by reducing the number of tax slabs to three. It also suggests including petroleum products under GST to broaden its base, aiming for a tax system more aligned with global trade dynamics.

Launched on July 1, 2017, GST merged around 17 local taxes and 13 cesses into a five-tier structure. Over the past eight years, average monthly collections have more than doubled, indicating GST's robust framework. This trend underscores the potential benefits of further system refinements.

The report advocates for a shift from the current four-tier tax structure to a three-tier one, promising reduced interpretational disputes and improved compliance. It also recommends the introduction of GST on petroleum products like Aviation Turbine Fuel (ATF) to address industry cash flow issues and fulfill GST's initial objectives.

(With inputs from agencies.)