The Prime Minister's Economic Advisory Council (PMEAC) Chairman Bibek Debroy has said that the four-rate slab structure of the Goods and Services Tax (GST) regime is likely to be reduced to three as the process of rationalising India's new indirect tax regime proceeds further.
The PMEAC Chairman indicated that only very few countries including India, Canada and perhaps Australia have implemented GST follow the principle of dual GST whose terminal role from an economists point of view is to have a single tax structure. Noting that a multiple tax structure makes GST implementation an extremely difficult process, he said the consensus on this overhaul of India's indirect tax regime was that the reform, although not perfect, should be rolled out and it (GST) could be tweaked as we go along. Besides, he pointed out that countries had taken as long as 10 years for their GST systems to stabilise.
The GST, which replaced 17 central and state levies including factory-gate, excise duty, service tax and local sales tax or VAT, is India's biggest tax reform in 70 years of independence and will help modernise Asia's third largest economy.
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