Opinion | The reform agenda ininto bring GST ininto Its promised gloryMint #Goods_ServicesFebruary 11, 2019
Online invoice matching for every transaction, use of e-way bills, multiple monthly filings, all make things extremely complicated.
And there are still too many rates and almost one-third of gross domestic product (GDP) is left out of the tax net, defeating its main purpose.
The multiple rate slabs have reduced and most items have converged to the 18% rate.
Is it possible to tweak the GST system to deliver its original promise?
That promise was a sustained jump in GDP growth rate of 1.5% to 2% per year, according to estimates of the National Council of Applied Economic Research (NCAER).
Another promise was lower inflation, due to removal of cascading taxes (i.e. tax on tax).
The first step is to have only one slab of 12% for all goods and services, except maybe for food and medicines.
The third important step is to do away with the e-way bill completely.
Eliminating the e-way bill will greatly reduce the compliance burden.
So actually, the reformed GST will be 10% plus 2% earmarked for local bodies.