Fixing the GST

Fundamental improvements to the flawed structure needed

It has been reported that the Goods and Services Tax (GST) Council, the body comprising the Union finance minister and those of the states, is considering a revision in the indirect tax’s rate structure. In particular, as reported by this newspaper, it is possible that the 5 per cent rate will be raised to 6 per cent. The government hopes that this will increase the effectiveness of the tax, which has been severely underperforming against the target of around Rs 1.2 trillion a month. But this deficit will not be fully bridged by a marginal increase in the lower rate