Lighten the burden of indirect tax for the poorer Indian households
The next Goods and Services T ax (GST) council meeting could be an opportune time to assess the functioning of India’s indirect tax regime and address major concerns. More specifically, the GST burden on poorer Indian households troubled by high and sticky retail inflation needs lowering and multiple exemptions reduced to check market distortions. The latter would help widen the tax net.
Moreover, the Council must resist any pressure to raise GST rates that will add to market distortions. Similarly, a simpler filing and reporting regime will encourage voluntary GST registration by small and medium enterprises (SMEs) and aid compliance. That will give a boost to revenue generation without the need for raising tax rates.