GST revenues robust amid stricter audit, 2024 may see tax base widen Finance Minister Nirmala Sitharaman had said earlier this year that the GST regime has brought a significant improvement in the system which has not only benefited the states but ultimately the “people as well”

One may argue that the current weighted average tax rate under GST is, which is lower than the revenue neutral rate of 15%, has led to lower tax collections, primarily affecting state tax revenues.

However, a prolonged GST mop-up, a larger tax base, and lower compliance costs have helped both Centre and state revenue collections and cushioned budgetary slippage, which experts expect to continue in the coming year.

A review of GST slabs with simplification as a key objective will likely happen once a new government takes over after the Lok Sabha elections.

The recast should however must aim at expanding the tax base and improving tax credit flows, rather than a wholesale hikes in rates that could hit consumption, analysts believe. The list of items exempt from tax may be pruned in the review.