Yes, saw away more customs slabs, GoI

Finmin has turned its attention to streamlining customs slabs after having made adjustments to I-T and GST. The number of customs slabs has been pruned over the past couple of years to 8 rates, including 0. This is still too many against GST's 2, excluding exemptions and demerit goods. Rationalising GST rates imposes conditionalities on customs rates to avoid duty inversion where inputs are taxed at higher rates than output. India's flurry of trade deals also necessitates a review of customs duty rates. GoI must tailor its import duty structure in accordance with plans to emerge as a major global manufacturing base.

Both I-T and GST have witnessed significant improvement in tax administration, resulting in higher revenue buoyancy despite lowering of tax rates. A similar intervention is required in customs to boost collection and reduce litigation. Tax administration has been working towards raising compliance and averting disputes. Analytical tools deployed with positive effects in I-T will come in handy during an overhaul of customs. Aligning slabs with a self-policing tax like GST ought to improve customs administration. Dispute resolution can be speeded up through amnesty schemes, which may be in the offing.

Reform of customs will complete overhaul of India's principal taxes. The process has been slow, but steady. It has taken a decade for GST to deliver anticipated economic benefits, and for I-T to set in much-above per-capita income. India now has in place a growth-oriented tax system. Critically, effects of tax reforms are showing up in the numbers. An efficient tax machinery is key to ensuring redistribution during a spurt in economic growth. A revamp of customs will complete a triangle of reforms that seemed beyond reach for several decades. Credit goes to the NDA government for squeezing so much tax reform into three terms in office. It realised, early on, the role of taxes in economic development, and has worked consistently on improving efficiency.