As India marks eight years of the Goods and Services Tax (GST) regime, former CBIC Chairman Najib Shah has called for urgent reforms in the tax structure and dispute resolution framework. Speaking to CNBC-TV18 alongside former Revenue Secretary Tarun Bajaj, Shah said the need for rate rationalisation and a fully functional GST tribunal is more pressing than ever.
Shah acknowledged the progress made under GST, but said the current multi-rate structure remains a challenge. “Everyone agrees that some kind of rate rationalisation is essential, but implementing it will be difficult,” he noted. He added that merging slabs like 12% and 18% into a single rate- say 15% or 16%- could be one way forward, provided exemptions are pruned to maintain efficiency in the value-added tax system.
He cautioned that any rationalisation would have revenue implications, and said political will and consensus are necessary to make the transition viable.
Apart from rate reform, Shah highlighted the need to streamline compliance. He raised concerns over blocked input tax credit, difficulties in registration, and excessive auditing. “These compliance issues should be simplified further – and this can be done by the administration without the GST Council,” he said.
A key institutional gap Shah flagged was the absence of a GST tribunal. “A GST tribunal is also urgently needed. Everyone agrees it’s essential, but action is pending,” he said, underscoring that without a working tribunal, the litigation burden will continue to grow.
On the question of expanding GST to include petroleum products, Shah was pragmatic, noting that neither the Centre nor states are likely to agree soon, as these are major sources of revenue.
Despite these challenges, he said the GST Council’s ability to build consensus remained its biggest strength. Reflecting on the early days of the reform, Shah credited the late Arun Jaitley, saying, “The enormous patience of Mr. Jaitley- to build consensus, to listen to diverse opinions… was phenomenal. If not for him, I don’t believe GST would have come into effect when it did.”
