Fifteenth finance commission chairman NK Singh on Friday called for major changes in the GST structure, including reducing the cumbersome compliance procedures and also doing away with frequent rate changes, to improve collection.
He also pitched for a rationalisation in Centrally- sponsored schemes, and blamed the government for not clearly defining the role of the Niti Aayog, which as of now does not have any powers to take financial decisions.
The comments from the chief of the commission that decides on the revenue distribution between the Centre and the states, come amidst concerns about the continuous fall in GST collection which has not touched the targeted Rs 1 lakh crore every month barring one month.
“If you do not simplify GST, you will be defeating the very purpose and intention of why we took this far reaching step,” Singh told SBI chairman Rajnish Kumar, while delivering the LK Jha memorial lecture at the RBI headquarters here this evening.
“The cumbersomeness of compliance is one of the important factors why I believe that there is a huge scope for improving the revenue realisation from GST,” he added.
“Equally, I do believe the frequency with which the rates have been changed is unbelievable. You are playing with the rates of taxation, these are serious issues and these are not rates of mutual accommodation,” he said.
However, he noted that despite all these issues, we have seen one of the fastest GST adoption rates and credited same to the prime minister and the then finance minister Arun Jaitley, but stressed on the need to go back to the drawing board urgently.
The changes sought will minimise the cost of compliance, make the system less onerous and finally lead to an improved trajectory of revenue collection.