GST Rate Cuts Improve Tax Compliance in India

• Lower GST rates may improve tax compliance in India per EY's Saurabh Agarwal.
• Reduced rates could decrease tax evasion and expand India's overall tax base.
• Efficient GST boosts revenue, enabling investment in India's economic growth.

In India, the Goods and Services Tax (GST) is a critical economic tool. Reducing GST rates could boost tax compliance, according to EY's Saurabh Agarwal, thus expanding the tax base.

GST's Impact in India

The GST has changed the way India does business. A key goal is to streamline taxes. Lowering rates, as suggested by Saurabh Agarwal, could make compliance easier. It's about making the system work better for everyone, from small shopkeepers to big businesses across India.

Reducing Evasion Efforts

Tax evasion remains a challenge. Lowering GST rates could reduce the temptation to evade taxes. By making rates more reasonable, it's thought that more people will willingly comply. This is especially relevant given India's diverse economic landscape.

Tax Base Expansion

A wider tax base means more people are contributing. With lower rates, more businesses and individuals might be brought into the tax net. This expansion is crucial for government revenue, which funds vital services and infrastructure development in India.

Economic Efficiency Boost

A more compliant tax system is a more efficient one. This leads to more stable revenues and predictable budgets. Improved efficiency means that India can invest more in its growth. It is a win-win situation for India's economy overall.