Since the beginning, the policy-makers knew that the Goods and Services Tax (GST) should have minimal slabs and rates. Yet, political compromises, which are not economically or fiscally sound and efficient, needed to be made. So, India was stuck with five slabs. Only now has the Government decided to reduce them to two. Of course, as expected, the higher number of rates led to major problems for commercial entities which have often been swamped by the burden of compliance. In addition, it re-opened the doors for massive corruption and tax evasion, something which was prevalent in the pre-GST era, and something which GST was aimed to eliminate.
Each year, during business conclaves and similar gatherings, industry leaders appealed to the Government to simplify the rules and procedures. Each year, there were scores of real-life stories of how small enterprises shut shops because they simply could cope up with the complex compliance requirements. Opposition parties and leaders repeatedly targeted the Government for mishandling GST, leading to large scale closure of small and medium enterprises.