India's GST Dynamics: Navigating Towards a Unified Tax System

Union Finance Minister Nirmala Sitharaman stated that while GST slab rationalization is underway, India is not yet ready for a single-rate GST. The current four-rate system was established through careful alignment with state-level taxes. Reforms aim to simplify the system for the poor and middle class.

Union Finance Minister Nirmala Sitharaman announced on Thursday that India is on its path to rationalizing the Goods and Services Tax (GST) slabs, though a single-rate GST system is still a future possibility. Her remarks were made during an event in Kolkata, where she addressed the complexities of the current system.

Sitharaman clarified that the four-rate GST structure, comprising 5, 12, 18, and 28 percent, was meticulously designed to align with various state-level taxes. This structure was not arbitrarily chosen but resulted from a detailed and collaborative review process.

Highlighting ongoing reform efforts, Sitharaman emphasized the aim to simplify GST, underscoring its significance for creating a unified national market by eliminating state barriers. She also mentioned further documentation to showcase GST's impact and reforms, especially in reducing rates on common-use items.

(With inputs from agencies.)