Many countries, including India, apply a multi-rate VAT system and exemptions. The author in this article compares the rationale for a single VAT rate with the justifications generally given for applying multiple rates and exemptions. He focuses on India and evaluates the main justification for multiple rates and exemptions in its GST system, namely combating regressivity. It is argued that relief for the burden the GST particularly imposed on the lowest income groups can be provided more effectively than through reduced rates and exemption by incorporating into the GST system a rebate for GST paid up to the poverty level.