The Goods and Service Tax (GST), introduced in 2017, requires a comprehensive revamp, experts attending a two-day international seminar organised by the Gulati Institute of Finance and Taxation (GIFT) on ‘India’s Experience with GST’ have opined.
The tax system has adversely impacted the revenues and economic independence of States, they said. The speakers at the seminar, which concluded here on Saturday, also expressed concern regarding fiscal federalism against the backdrop of GST implementation.
The need for a revamp of the tax rates and a constructive resolution to the States’ demand for an extension of the GST compensation period beyond June 2022 were highlighted at the seminar which saw participation by Indian and foreign delegates.
The seminar concluded that the country can move ahead with GST only by addressing the concerns raised by all the stakeholders.
Better implementation
Addressing the valedictory session, Chief Secretary V. P. Joy said the GST system needs improvement at the implementation level, which also calls for cooperation between the Centre and the States. Although simplicity was maintained at the start, the system is now turning complex, creating problems for trade and commerce sectors.
Economist M.A. Oommen underscored the need for a restructuring of the country’s tax structure. State Planning Board member K. Ravi Varman said unified systems such as GST were essential for the co-existence of corporate-political leaderships. But they weaken the States and can take centralisation of powers to an alarming level, he said. The coming five years will prove crucial for GST as the compensation period ends in 2022, former Planning Board member K.N. Harilal said. This could worsen the States’ fiscal crisis, he said.
