Post by : Jyoti Gupta

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India’s nationwide Goods and Services Tax (GST) turns eight this week, and a new PwC India study says it is time for a makeover.

Right now, GST is split into four rates—5 percent for basics, 12 percent and 18 percent for most goods and services, and 28 percent for luxury or “sin” items. PwC argues that collapsing these into just three slabs would cut red tape, reduce disputes, and make life easier for companies that file returns every month.

The report also urges the GST Council—the body of central and state finance ministers that sets policy—to pull petrol, diesel, natural gas, and aviation turbine fuel into the GST net. Those fuels still face a mix of central excise duty and state value‑added tax, leading to layered costs that businesses say hurt cash flow.

States are wary of losing revenue if fuel moves to GST, and they rejected the idea of including jet fuel at a council meeting last December. PwC suggests designing a safety net for states so that they do not see a sudden dip in earnings.

Since GST launched on July 1, 2017, monthly collections have doubled—from about ₹90,000 crore in the first year to an average of ₹1.84 lakh crore in 2024‑25. April 2025 set a record at ₹2.37 lakh crore. PwC says simplifying the rate structure and fixing “inverted” taxes—where inputs are taxed higher than finished products in sectors like electric vehicles, aviation, and e‑commerce—would unlock even more growth.

With global investors eyeing India’s manufacturing and tech hubs, the consultancy believes a cleaner, easier GST could give the country an edge. The council is expected to take up reforms in coming meetings, but any big change will need both the Centre and the states on the same page.

GST Council