IMF for sim­pli­fied GST

Commercial Vehicle - - NEWS -

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.

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