Bengal finance minister Amit Mitra has called for a comprehensive paper that will address all the issues and concerns related to the GST.

“Such a comprehensive paper may be placed before the GST Council as a single agenda item for collectively deciding upon the future course of action,” Mitra said in a letter to Union finance minister Nirmala Sitharaman on the completion of two years of the GST.

Mitra in his letter highlighted key concerns, such as distortions in the rate structure, low collections, lack of a system-based matching of returns and lack of stability in the GSTN system.

“The first concern is the huge complexity in the rules and procedures, especially in the return formats. The scale of the complexity is so high that it defeats the basic objective of introducing GST, that is, to simplify the indirect tax system, make it more tax payer friendly and improve the ease of doing business,” Mitra said in his letter.

He said that for want of an in-built system-based matching of returns, hawala billing and fake trade has grown which has affected tax realisation. Moreover, without adequate testing and pilot studies, the introduction of a new returns format may backfire.

Mitra suggested a time-bound staggered approach to the GST rate rationalisation.

“The rate structure of 28 per cent should be completely abolished on items other than sin goods and services. Also, there should be rationalisation of rates on goods and services attracting 12 per cent and 18 per cent GST so that most of the items are brought in the 12 per cent category,” he said.

Mitra said the revenue collection from indirect tax in the past two years has been in the range of Rs 90,000-Rs 1.14 lakh crore and even though collections have seen some marginal improvement in the last few months, it is still far from reaping the benefit of revenue buoyancy.

He further said the GSTN system was yet to stabilise. “There are still many modules that are not yet functional in the portal and manual systems are still being used,” he said.