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Along with the implementation of GST 2.0, which includes rate rationalisation and inclusion of currently excluded items such as petroleum products and alcohol, etc., GST should continue to focus on ironing out hitches in implementation of the decisions taken. GST network should be constantly revamped, and processes fine-tuned. A uniform audit procedure pan India should be finalised, writes former CBIT chairman Najib Shah.
The Goods & Services Tax (GST) is never very far away from the news. As we near the completion of six years there are suggestions that we now need ‘GST 2.0’. What this means has been very loosely enunciated by commentators.
The first item in the 2.0 wish list is the more oft-discussed reduction/ rationalisation in tax slabs to three from the present four. The rates suggested being a merit rate of 5 or 8 percent, a 15 percent standard rate and 30 percent demerit rate. While we can debate about the actual slabs, a three-tier structure will be an ideal situation for the tax administration.
The lesser the tax slabs, the simpler the tax administration. It also becomes less challenging to classify the product apart from reducing the chances of misclassification and evasion. A Group of Ministers has been constituted to examine and recommend the way forward on the rationalisation path. The very fact that recommendations are still forthcoming would indicate the challenges. So, while the desired goal can be a reduction to three or even two tax slabs, this cannot happen now.