New Delhi, March 17 -- India's goods and services tax (GST) still struggles with a basic design problem: the integrity of its input tax credit (ITC) chain. The recent rate rationalization simplified slabs, but its merger of the 12% category with the 5% slab largely applies to supplies where ITC is restricted or unavailable.

In such cases, the system resembles cascading turnover-style taxation and weakens the value-added tax (VAT) principle of seamless credit and tax neutrality. So, beyond rate adjustments, deeper structural issues remain.

The proliferation of amendments and layered restrictions has made the law increasingly intricate and compromised ITC chain integrity. Without restoring credit neutrality, simplification of rates alone ...