The GST was implemented by the Prime Minister Narendra Modi government on July 1, 2017.
The tax rates under the Goods and Services Bill are among the world's second highest, said World Bank in its report.
The GST was implemented by the Prime Minister Narendra Modi government on July 1, 2017.
GST is one of the most complex with the second highest tax rate in the world among a sample of 115 countries which have a similar indirect tax system, the World Bank said in its bi-annual India Development Update released on Wednesday.
The GST at present has four tax slabs that are, 5%, 12%, 18%, and 28%. Currently, around 49 nations use a single GST slab of GST, while 28 countries use two slabs.
Besides India, there are only five countries, which use four non-zero slabs. The other countries are Italy, Luxembourg, Pakistan and Ghana, which makes India with the highest number of different GST slabs in the world.
However, the World Bank said while the constant adjustment in various tax slabs can affect economic activity for multiple months, the benefits of the GST are likely to outweigh its costs in the long run.
“Key to success is a policy design that minimizes compliance burden, for example by minimizing the number of different rates and limiting exemptions, with simple laws and procedures, an appropriately structured and resourced administration, compliance strategies based on a balanced mix of education and assistance programs and risk-based audit programs,” it said.
Meanwhile, the World Bank projected India's GDP growth at 7.3% for the next financial year and accelerate further to 7.5% in 2019-20.
The World Bank's biannual publication, India Development Update: India's Growth Story, expects the economy to clock a growth rate of 6.7% in the current fiscal ending March 31.
The report, however, observed that a growth of over 8% will require "continued reform and a widening of their scope" aimed at resolving issues related to credit and investment, and enhancing competitiveness of exports.
"The Indian economy is likely to recover from the impact of demonetisation and the GST, and growth should revert slowly to a level consistent with its proximate factors -- that is, to about 7.5% a year," the report said.
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