The Centre has begun fresh discussions on a significant revamp of the goods and services tax (GST) structure to simplify it further and rework the rate slabs, officials said.
There have been meetings at the highest level in the government recently on measures to make the tax leaner and efficient.
The GST rationalisation has also gained urgency with India signing a trade deal with the UK and closing in on one with the US to ensure industry does not suffer any local handicap.
The levy that created a single national market for goods and services completes eight years in July. This follows a comprehensive amendment bill introduced in parliament in February this year to simplify the income tax law.
"GST is a key focus area," said an official, adding that the idea is to remove pain points emanating both from the structure itself and its implementation.
Another official said there is a growing view in the central government that material intervention was required instead of tweaks at the margins to the rate structure.
"Tax collections have stabilised and with the compensation cess about to end, it is an opportune time to take a call on the broad structure of the tax," said a person familiar with the development. "The exercise should be meaningful to make some difference at the ground level."
The deliberations have been centred around the slab structure of the tax as also several concerns flagged by industry at various intervals.
The industry and tax experts have mooted a three-slab structure, simpler procedures and easier enforcement. They have also flagged high-handedness by the field formations and complexities of the tax, which is jointly administered by central and state tax authorities.
"Competitiveness of India Inc is crucial and the government is looking at areas to further ease of doing business so that industry can take real advantage of these agreements," said a third official, adding that several new initiatives are also being considered in the revamp.
GST Council, the apex decision-making body for the indirect tax, had set up a ministerial panel to look into rationalisation of the tax structure including rates in September 2021, but it is yet to make much headway with varying views on the proposed changes.
A number of options examined by the panel include introducing dual rates and price thresholds for goods that have a luxury category, a move that could further complicate the structure as per industry experts.
There have been meetings at the highest level in the government recently on measures to make the tax leaner and efficient.
The GST rationalisation has also gained urgency with India signing a trade deal with the UK and closing in on one with the US to ensure industry does not suffer any local handicap.
The levy that created a single national market for goods and services completes eight years in July. This follows a comprehensive amendment bill introduced in parliament in February this year to simplify the income tax law.
"GST is a key focus area," said an official, adding that the idea is to remove pain points emanating both from the structure itself and its implementation.
Another official said there is a growing view in the central government that material intervention was required instead of tweaks at the margins to the rate structure.
"Tax collections have stabilised and with the compensation cess about to end, it is an opportune time to take a call on the broad structure of the tax," said a person familiar with the development. "The exercise should be meaningful to make some difference at the ground level."
The deliberations have been centred around the slab structure of the tax as also several concerns flagged by industry at various intervals.
The industry and tax experts have mooted a three-slab structure, simpler procedures and easier enforcement. They have also flagged high-handedness by the field formations and complexities of the tax, which is jointly administered by central and state tax authorities.
"Competitiveness of India Inc is crucial and the government is looking at areas to further ease of doing business so that industry can take real advantage of these agreements," said a third official, adding that several new initiatives are also being considered in the revamp.
GST Council, the apex decision-making body for the indirect tax, had set up a ministerial panel to look into rationalisation of the tax structure including rates in September 2021, but it is yet to make much headway with varying views on the proposed changes.
A number of options examined by the panel include introducing dual rates and price thresholds for goods that have a luxury category, a move that could further complicate the structure as per industry experts.
