Eight years of GST rollout: PwC India proposes three-slab structure, inclusion of petro-products to ease compliance

As the Goods and Services Tax (GST) marks eight years since its rollout, PwC India has called for key reforms, including a simplified three-rate structure and the phased inclusion of petroleum products under the GST ambit, starting with Aviation Turbine Fuel (ATF).

The GST regime, introduced on July 1, 2017, replaced 17 local taxes and 13 cesses with a unified indirect tax framework. Monthly GST collections have grown from an average of Rs 90,000 crore in 2017-18 to Rs 1.84 lakh crore in 2024-25. In April 2025, revenues peaked at a record Rs 2.37 lakh crore.

In its report, PwC said the time is ripe for aligning India’s GST system with global trade dynamics and attracting greater investments. “GST in India now stands at a critical juncture where aligning with global trade dynamics is essential,” the PwC report stated, quoted PTI.

Currently, GST has four tax slabs — 5%, 12%, 18%, and 28%. PwC has suggested reducing the framework to three tiers to minimise disputes, enhance tax certainty, and simplify compliance. It also noted that sectors such as electric vehicles, aviation, and e-commerce are struggling with inverted duty structures, leading to credit accumulation.

The report also recommended bringing petroleum products under GST — beginning with ATF — to resolve cascading tax effects and improve industry cash flows. Petrol, diesel, natural gas, and other fuels remain outside GST and are still taxed under central excise and state VAT, according to PTI.

“A policy change that includes these items under GST, along with a system to protect state revenues, would simplify the tax structure, ease cash flow issues for businesses, and support the original goals of GST,” the report added.

States have been reluctant to accept such reforms due to revenue concerns. In the GST Council meeting held in December 2024, a proposal to include ATF under GST was rejected by several states.