Experts urge balance between compliance ease and revenue safeguards in GST 2.0 rollout

At a time when India’s Goods and Services Tax (GST) regime stands at a critical juncture, experts, administrators and practitioners called for a careful balance between easing compliance and safeguarding revenue at an ICSSR-sponsored seminar hosted by the Centre for Economic and Social Studies (CESS) in Hyderabad on Thursday.

Titled “GST Reforms: Socio-Economic Implications”, the lead address was delivered by M. Ragunandan Rao, Commissioner of Commercial Taxes, Telangana.

He described GST as a “work in progress”. He underlined the ‘Trust-First’ philosophy of the system, noting that 95% of taxpayers operate without intrusive scrutiny. At the same time, he highlighted the digital transformation driven by the GST Network, calling it one of the country’s most significant digital products and a “digital highway” for the economy, comparable in scale and impact to Aadhaar and the railway reservation system. He also pointed to structural challenges such as the “One tax and Two Administrations” model and stressed the need for further research to determine whether GST’s core objectives have been fully achieved

K. Ravi, Joint Commissioner, Commercial Taxes, identified three major pillars of reform. These include structural corrections to address the “inverted duty structure”, particularly in sectors such as textiles and fertilizers where inputs are taxed at higher rates than finished products. He also spoke of rate rationalisation, with a move towards a simplified two-slab structure of 5% and 18%, while luxury and “sin” goods would continue in higher brackets.

Roopa Sowmya, Joint Commissioner, Commercial Taxes, cautioned against an “alarming” rise in suspicious registrations. While the three-day approval window has facilitated genuine business activity, she warned that it is also being misused by fraudulent entities to generate fake invoices, leading to revenue leakage.