Untangling the GST mess

Now, in the 5th year of GST, it is the opportune time to look at reforming and refining the system to achieve the original outcomes of a good and simple tax. The first important reform is to broaden the base by minimising the number of exemptions and including petroleum products and electricity in the GST bracket. It can help in reducing petrol prices for end-consumers. Second, there is a need to reduce the number of tax slabs to one or two and gradually eliminate compensation cesses. This will help in reducing problems related to classification of products, disputes, and lobbying. A single rate at 15% with an aim to reduce it to 12% in 10 years should be the aim. Third, ease GST compliance costs for businesses by rationalizing the compliance requirements and having a single identification number.