Think Change Forum calls for a single GST rate, releases white paper

New Delhi: The Think Change Forum (TCF), an independent New Delhi–based think tank, on Monday urged sweeping reforms in India’s GST system through a white paper titled “GST 2.0: Two Slabs Today, One Rate Tomorrow”.

Written by Prof. Nilanjan Banik of Mahindra University and ISB, the paper argues that GST’s long-term credibility depends on simplification, with just two slabs—5% and 18%—and a strict cap on the peak rate at 18%, rejecting proposals for a 40% bracket.

The report cautions that a 40% slab, even for sin or luxury goods, could expand over time, fuel-ling distortions, grey markets, and litigation. Instead, pegging the top rate at 18% would remove inverted duty structures, reduce compliance burdens, and promote growth through higher con-sumption and greater compliance.

“GST reform must go beyond symbolism. The details matter. A transparent, predictable system with a peak rate of 18% will make ‘One Nation, One Tax’ a reality,” said Ranganath T., Secre-tary General of TCF. Prof. Banik emphasized GST 2.0 should avoid multiple slabs, prioritizing simplification for sustainable revenues.

The paper highlighted three pressing challenges: global trade realignments affecting India’s ex-ports, risks of grey markets thriving under high ad valorem rates, and excessive reliance on cesses that already push effective taxes on items like tobacco and SUVs beyond 40%. It offers six recommendations: anchor GST to two slabs plus a transparent cess; legislate an 18 per cent cap; publish a “Cess Rulebook”; avoid backdoor revenue measures; cut litigation through clarity; and phase reforms with fiscal support for states after 2026. TCF said adopting these measures would make GST 2.0 a landmark reform. Mpost