The reforms built on pillars of structural reforms, rate rationalisation, and ease of living have been sent to the Group of Ministers (GoM) constituted by the GST Council.
Key Pillars of Proposed Reforms
- Structural Reforms:
- Inverted duty structure correction: Align input–output tax rates to reduce accumulation of input tax credit and support value addition.
- Inverted duties refer to a situation where the import tariff on inputs is higher than the tax levied on the final output. It is also observed in cases where the inputs are taxed but the final output good is tax-exempt.
- Resolving classification issues: To streamline rates, minimize disputes, simplify compliance, and ensure equity.
- Stability and Predictability: To provide long-term clarity on rates and policy direction to build industry confidence.
- Inverted duty structure correction: Align input–output tax rates to reduce accumulation of input tax credit and support value addition.
- Rate Rationalisation: It includes the following
- Reduction of taxes on common-man items and aspirational goods,
- Reduction of slabs: It aims to essentially move towards simple tax with 2 slabs (Standard and Merit).Special rates only for select few items.
- Using fiscal space created by the end of Compensation Cess for long-term sustainability.
- Ease of Living:
- It includes technology driven seamless registration, implementing pre-filled returns (reducing manual intervention and eliminating mismatches) and faster and automated processing of refunds for exporters.
About Goods and Services Tax (GST)
|
