Everything is Everything Ep 121: How to Fix Our GST
Oct 22, 2025
Dive into the intricate world of India's GST, where the hosts dissect its original intent and current failures. Discover how cascading taxes hinder economic growth and the importance of a well-designed VAT. Learn about the role of zero-rating exports in fostering global competitiveness. The discussion emphasizes the need for low rates and a broad base to minimize evasion. Tune in for a compelling argument on restoring seamless input tax credit and adopting effective tax strategies to reignite growth.
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Three Pillars Of Growth
- Economic growth depends on three pillars: specialization, learning-by-doing, and globalization.
- Tax policy must not interfere with these engines or it will stunt GDP.
Cascading Taxes Inflate Effective Rates
- Cascading taxes charge tax on tax across production stages and massively raise effective rates.
- This creates perverse incentives for vertical integration and harms specialization.
Use VAT With Input Tax Credit
- Implement a value-added tax (VAT) that taxes only the value added at each invoice, not gross production.
- Ensure input tax credits flow so each stage remits only net added tax, preserving neutrality.