Eight years of GST: PwC suggests petro-products inclusion, decreasing tax slabs

The GST Council, comprising Finance Ministers from the Centre and States, ought to simplify compliance, cut back tax slabs to 3, and broaden the bottom by bringing petroleum merchandise beneath GST, a PwC India report mentioned on Monday (June 30, 2025).

Goods and Services Tax (GST), launched on July 1, 2017, completes eight years on Monday (June 30, 2025). GST subsumed about 17 native taxes and 13 cesses right into a five-tier construction, simplifying the tax regime.

Over the final 8 years, the typical month-to-month GST assortment rose from ₹90,000 crore in 2017-18 to ₹1.84 lakh crore in 2024-25 (April-March). The collections touched a file excessive of ₹2.37 lakh crore in April 2025.

“GST in India now stands at a critical juncture where aligning with global trade dynamics is essential. The evolving landscape of international trade, coupled with the growing need to attract investments in the manufacturing and global capability centre (GCC) sectors, calls for a GST framework that is agile, investor-friendly, and globally competitive,” the PwC report mentioned.

Currently, GST is a four-tier tax construction with slabs at 5, 12, 18 and 28%. Luxury and demerit items are taxed on the highest bracket of 28%, whereas packed meals and important gadgets are on the lowest 5% slab “A transition from 4-tier to a 3-tier rate structure would reduce interpretational disputes, improve tax certainty and simplify compliance,” PwC mentioned.

A complete evaluate of GST fee slabs is required to minimise the disparity between the GST fee on inputs as towards that on output, particularly for sectors similar to digital car, aviation and e-commerce, which face credit score accumulations on account of the inverted tax construction, it added.

PwC additionally made a case for levying GST on petroleum merchandise, beginning with Aviation Turbine Fuel (ATF), to take away the cascading impact and money movement drawback of the trade.

Petrol, diesel, pure fuel and different petroleum merchandise proceed to be excluded from the GST regime and stay topic to central excise responsibility and state VAT. Such merchandise will be introduced inside the ambit of GST solely upon a selected suggestion by the GST Council, comprising finance ministers from states and the Centre.

The main concern, significantly amongst States, is that subsuming these commodities beneath GST would result in a income shortfall.

“A policy change that includes these items under GST, along with a system to protect state revenues, would simplify the tax structure, ease cash flow issues for businesses, and support the original goals of GST,” the report added.

In the GST Council assembly held in December 2024, states rejected a proposal to incorporate ATF, or jet gasoline, beneath GST.