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5)Multiple rate structure of GST makes the tax structure more flexible and not complex. Discuss citing global experiences. (250 words)

 

TopicIndian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Inclusive growth and issues arising from it.

5)Multiple rate structure of GST makes the tax structure more flexible and not complex. Discuss citing global experiences. (250 words)

Financial Express

Why this question

Implementation of gst has thrown up several challenges which has enabled us to refine GST laws. One of the striking feature of the new tax law is the multiple rate structure which was included for the purpose of equity. The experience of multiple rate structure needs to be examined in light of global best practices to understand whether it makes the tax structure flexible or complex.

Key demand of the question

The focus of the question is on analysing the pros and cons of multiple rate structure and whether it simplifies or makes the gst structure more complex. There have been several issues that have cropped up due to this provision such as classification of sanitary napkins etc which has caused controversy. In this light, multiple slab provision has to be examined. The question also asks us to analyze the experience of other countries and institutions to understand what the global best practice is.

Directive word

Discuss – This is an all-encompassing directive – you have to debate on paper by going through the details of multiple rate structure in gst concerned by examining each one of them. You have to give reasons for both for and against arguments.

 

Structure of the answer

Introduction – Explain the multiple rate structure of GST.

Body

  • Highlight India’s economic performance since implementation of gst. That will lead to examining the provisions of GST such as multiple rate structure.
  • Highlight the impact and benefits that has accrued out of this provision – equity, protecting revenue etc. The benefits should be seen in the context of whether they bring greater flexibility. Here quote from the reports of international institutions.
  • Highlight the issues with such a regime. Analyze whether they bring in more complexity.
  • Bring out the global experience with multiple rate structure to show that India is acting as a pioneer when it comes to implementing GST

 

Conclusion – Highlight that still a long way to go in adjusting to this massive reform in the indirect tax regime. Also provide a conclusion to highlight whether it