Topic :Indian Economy and issues relating to planning, mobilization of resources, growth, development.
6) The GST regime of the country requires compliance simplicity not conceptual simplicity. Comment in the light of recent controversies of making GST – a single rate platform. (250 words)
Why this question:
The article discusses the Congress manifesto that promises to work towards a single GST rate, and to bring petroleum under goods and services tax. Thus it is important from the exam point of view to evaluate such a decision and its merits and demerits.
Demand of the question:
The answer must evaluate in detail the recent controversies surrounding GST, about making it a single rate platform. Evaluate the pros and cons of such a move.
Comment– here we have to express our knowledge and understanding of the issue and form an overall opinion thereupon.
Structure of the answer:
Start by explaining the context of controversies surrounding GST with respect to single rate.
- Differentiate between compliance simplicity and conceptual simplicity
- Why is the idea of single rate bad? – complex and diverse society with huge income variations, the idea of a tax rate that is the same for every product, whether consumed by the rich or poor, is bad from the point of view of political optics and equity.
- Explain the complexity of GST structure.
- Weigh the pros and cons of such a move.
- Conclude with what should be done?
Conclude with way forward.