It is a settled principle of indirect taxation that the best structure is one that is based on a single and moderate rate of tax, with no exclusions and exceptions. Diluting this principle will always lead to sub-optimal outcomes. In India’s case, one might have argued that this principle was difficult to follow at the time of the GST’s introduction because of political and economic pressures that prevailed then. However, things are very different now and an overhaul of the GST regime is needed if the economy is to stand any chance of coming out of its recession in a reasonable time frame. Frankly, the decades-old socialist mindset that remains entrenched in India’s policy making needs to be revisited. Adit Jain shares his insights.

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