IMF for simplified GST
The International Monetary Fund (IMF) has urged India to rethink its GST structure. Pushing for a simplified structure, the organisation is known to have expressed that the multiple rate structure and other features could give rise to high compliance and administrative costs. In its annual country report, the IMF is claimed to have said that a dual rate structure with a low standard rate and an additional higher rate on select items can be progressive and preserve revenue neutrality. The GST as an indirect tax levied on the supply of goods and services in India, came into effect on July 01, 2017. It unified and harmonised numerous indirect taxes across all states of the federation and the central government. Also calling for streamling exemptions, the IMF is known to recommend that a revenue-neutral reduction in the number of rates would raise the effective rates for poorer households while reducing those for richer ones. Terming it as the key cost of moving to a simpler system, the IMF, in its report is claimed to have mentioned that India belongs to a small group of five countries having four or more GST rates. The effect of GST on the transport industry has been reflecting through warehouse consolidation and spending less time at state borders.