The Indian tryst with indirect tax reform seems to be moving in the opposite direction—from chaos to order. The complicated GST structure we began with can partly be explained by the messy federal bargaining in the GST Council and partly by a flawed incentive structure. Forty-nine countries had a single indirect tax rate while 28 had two slabs. The recent rationalization of GST rates and the simplification of some reporting procedures is welcome. The problems of the complicated GST with high compliance costs are now evident.

Source: Mint January 08, 2019 17:37 UTC