The much talked about GST second generation reforms provided a breath of fresh air for citizens. Economists have been urging policymakers to refine the GST ever since its inception in 2018 to a single or dual rate system which was the original intent of the reform itself. While there has been a lot of debate on the modalities of the rates — 5 per cent, 18 per cent and the 40 per cent – and the need to refine various types of it, it’s important to take a step back and look at the big picture. This is a triumph of the democratic spirit of the country and reflects strength of economic institutions that we have nurtured in the last few decades especially post economic liberalisation.

First, on the economics behind the GST reforms. There is no second thought on the importance of simplification, ease of compliance leading to greater revenue mobilisation and standardisation of GST across products. As noted by some commentators, the earlier version actually included as much as eight tax slabs, excluding the exemptions with rates ranging from 0.25 to 28 per cent. This was a much more complicated system compared to other countries which had mostly a three rate structure for the GST (Bhasin, Virmani 2021). The current GST reforms aim to achieve some of these objectives and is by and a large very good effort in addressing some of the issues in the present structure. While........

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