GST Reforms: Towards a Simpler Tax Structure

India’s Goods and Services Tax (GST) was introduced on 1st July 2017 with the vision of “One Nation, One Tax.” It subsumed multiple indirect taxes across the Centre and States, aiming to simplify compliance and promote ease of doing business.

However, the presence of multiple tax slabs — 5%, 12%, 18%, 28% plus additional cesses — made the structure complex. Critics often described it as “old wine in a new bottle,” since complexity persisted despite consolidation.

Now, a fresh reform push is on the horizon. The government has proposed rationalization of GST slabs:

Moving towards two main rates — 5% and 18%

Introducing a 40% rate for sin goods

Discontinuing the GST compensation cess

If implemented, these reforms could:

✅ Simplify the tax regime further

✅ Reduce compliance burden for businesses

✅ Lower market prices, boosting consumption

✅ Support manufacturers facing export challenges

✅ Promote ease of doing business in line with global standards

The GST Council, which includes both the Centre and States, will play a crucial role in finalizing these changes. A holistic revamp, rather than piecemeal measures, seems essential to truly make GST a “Good and Simple Tax.”

What are your thoughts? Will rationalization finally achieve the intended goals of GST reform?

#GST #Taxation #EaseOfDoingBusiness #IndianEconomy #Reforms