New Delhi: Think Change Forum (TCF), an independent think tank dedicated to generating new ideas and finding solutions for navigating through a new changing world, lauded the government’s initiatives to streamline the GST regime at the 53rd GST Council Meeting.
The GST Council meeting streamlined GST applicability for goods and services. Goods like aircraft parts to milk cans saw revised and uniform GST rates, while services such as Indian Railways’ platform tickets, retiring rooms, etc, were exempted. Besides these reforms, the GST Council also recommended waiving interest and penalties for Section 73 demand notices from FY 2017-18 to 2019-20 if full tax is paid by 31.03.2025, aiming to reduce GST-related litigations.
Recently, TCF released a set of recommendations for the government to improvise the tax system based on expert consultations and suggestions by domain experts. These recommendations advocate a shift in taxation mindset from ‘Rates’ to ‘Revenue’ to enable India become a $25 trillion economy by 2047.
Think Change Forum recently released a set of recommendations on “A Progressive Taxation Ideology to Accelerate India’s Path to Becoming a Developed Country”. These recommendations, based on views from noted domain experts emphasizes the shift in taxation mindset from Rates to Revenue as this is crucial for India’s goal of achieving a USD 25 trillion GDP by 2047. Green shoots of reforms as announced at the 53rd GST Council Meeting, are a vindication of this new taxation ideology, and a step forward for improving compliance and enlarging the tax base.
One of the key experts who contributed to this discourse at a Think Change Forum roundtable,
Mr. Rajat Mohan, Executive Director – GST, MOORE Singhi, said, “I am happy to see that the issues we raised and discussed on taxation, such as streamlining the GST regime, reducing slabs and minimizing unnecessary litigations, have prompted swift action from the government. The recent reforms introduced during the 53rd GST Council meeting, including adjustments in GST rates, extension of input tax credit deadlines, introduction of the Anti-profiteering Sunset Clause, elimination of interest on delayed returns and implementation of biometric-based Aadhaar Authentication, will significantly enhance the business environment and ease of doing business in our country.”
Prof. Manoj Pant, Ex-Director, Indian Institute of Foreign Trade & Expert in International Trade and advisor to Think Change Forum, said, “These reforms will not only improve compliance but also broaden the base of the GST regime. As the GST structure continues to be streamlined, we can expect the informal economy to gradually integrate into the tax net, facilitating India’s transition from a large economy to a developed one. The government’s latest initiative, with targeted measures to reduce litigations, is also a commendable step that will significantly enhance the efficiency of our taxation system.”
As India is home to a thriving informal sector, which still accounts for 30% to 35% of the economy, it is essential to widen the tax base and co-opt the informal sector into the formal taxation regime. Think Change Forum expects that reforms to further streamline the tax regime will be announced in the upcoming Budget, which will broaden the tax base and lead to more buoyancy in tax collections.
In line with this objective, Think Change Forum expects the government in the upcoming budget to make sharper reforms in direct taxes. This includes a proposal for a simplified rate structure – a single rate for businesses and a straightforward three-tiered structure for individuals, featuring low to moderate rates, without surcharges, cesses or substantial deductions.
Think Change Forum has recommended that the government adopt intelligent and smart taxation strategies to expand the tax base. Implementing tech-enabled tax administration will enhance the taxpayer experience, promote voluntary compliance, ensure prompt tax payments and enable effective enforcement. These measures are crucial for enlarging the tax base, boosting government revenue and paving the way for a developed India by 2047.