Rationalization of Tax Rates

• Efforts are ongoing to simplify and consolidate the current multi-rate structure
  
• Possibility of merging 12% and 18% into a single standard rate to reduce complexity
  
• Rate corrections for sectors like textiles, pharma, and food processing are being considered
  
• Council aims to make GST more predictable and business-friendly
  
• Rationalization will improve compliance and reduce classification disputes
  

Expansion of GST Base

• Inclusion of petroleum products, alcohol, and electricity is under discussion
  
• Bringing these under GST would remove cascading taxes and enhance uniformity
  
• States must agree on revenue-sharing mechanisms for inclusion
  
• Wider base improves tax-to-GDP ratio and government fiscal health
  
• Future budgets may announce phased inclusion of excluded items
  

Technology and Automation Enhancements

• AI and data analytics will be used for fraud detection and audit triggers
  
• Automation of return matching and invoice validation will improve accuracy
  
• Integration with income tax, customs, and bank databases ensures holistic compliance
  
• Expansion of e-invoicing, e-way bill system, and real-time reporting will continue
  
• GSTN infrastructure is evolving to support millions of daily transactions smoothly
  

Improved Compliance Framework

• Simplification of returns through the single return system for small taxpayers
  
• Enhanced composition schemes for MSMEs to reduce compliance burden
  
• Greater emphasis on faceless assessments and digital correspondence
  
• Standardization of penalties and redress processes across jurisdictions
  
• Educational campaigns to build taxpayer literacy and trust
  

Internationalization and Trade Benefits

• GST structure aligns with global VAT/GST models, aiding international investors
  
• Exporters benefit from zero-rated supply and seamless ITC refunds
  
• India may explore bilateral tax treaties or GST cooperation for e-commerce and digital services
  
• Harmonization with WTO, OECD, and cross-border trade practices strengthens competitiveness
  
• GST will support India’s goals under “Make in India” and global trade expansion initiatives