GST 2.0 Reforms: PAC Recommends Simpler Compliance for MSMEs
Why in the news
The Public Accounts Committee (PAC) urged the Finance Ministry to cut needless procedures and design a revamped GST 2.0 after consulting stakeholders.
Key facts
- Merge GST return forms and use a tiered approach with lighter rules for MSMEs.
- Indirect tax contribution fell from 38.76% (2017-18) to 36.92% (2019-20); AI and big data can improve revenue forecasts and compliance tracking.
- Honest taxpayers face criminal penalties for unintentional mistakes; PAC wants milder measures.
- Aadhaar-based authentication problems delay registrations and the One Nation One Tax vision.
Recommendations
| Area | Suggestion |
|---|---|
| GST portal | Step-by-step guidance and a smoother digital interface |
| Refunds | Clear timelines, status updates at each stage, separate grievance system |
| MSMEs | Fast-track filing and refunds through automation, less frequent returns, simple online reporting |
Significance
- Technology-led reform can reduce procedural burden and lift revenue.
Exam angle
- Body making the suggestions: Public Accounts Committee.
- Proposed framework name: GST 2.0.