As the Union Budget 2025 approaches, the Goods and Services Tax (GST) system is back in the spotlight, with political parties and economists urging for changes to the existing framework. The Congress party has called for the simplification of GST rates, criticizing the current structure for being overly complex and burdensome for businesses, especially small and medium enterprises (SMEs).
Congress leader and former Finance Minister, P. Chidambaram, highlighted that the multi-tiered GST rates, which range from 5% to 28%, have created confusion and increased compliance costs for businesses. The party has urged the government to streamline the tax system, reduce the number of tax slabs, and ensure that the GST burden on consumers and businesses is eased.
The Congress's demand comes as the government prepares for the 2025 budget, which is expected to include measures aimed at boosting the economy and easing the pressure on businesses in the post-pandemic recovery phase. The opposition party has also emphasized the need for a more efficient GST system to help businesses grow, reduce tax evasion, and make India's taxation system globally competitive.
On the other hand, the government has defended the current GST framework, arguing that the tax reform has increased revenue collection and formalized many sectors of the economy. However, the calls for reform are growing louder as businesses continue to struggle with the complexity of the tax system.
Economic experts believe that simplifying GST could have a significant impact on India’s growth trajectory, especially in the context of attracting foreign investment and making Indian products more competitive on the global stage. The debate over GST simplification is expected to intensify as the budget discussions unfold in the coming weeks.
