Dear businesses, GST pain may continue; CBIC chief says Goods and Services Tax will take 2 years to stabilise

By: |
Published: June 26, 2018 5:10:04 PM

Central Board of Indirect Taxes and Customs (CBIC) chief Vanaja N Sarna said that the GST would take two years for the GST to stabilise.

Dear businesses, GST pain may continue; CBIC chief says Goods and Services Tax will take 2 years to stabiliseGST would take a couple years or maybe more to settle down completely, said Vanaja N Sarna.

One year of GST: As India’s arguably the biggest indirect tax reform — Goods and Services Tax — is just a few days away from completing a year, Central Board of Indirect Taxes and Customs (CBIC) chief Vanaja N Sarna said that it would take two years for the GST to stabilise. “It would take a couple years or maybe more to settle down completely,” Vanaja N Sarna said in an interview with ET Now. However, she added that for the first year, the GST has not been “bad at all”.

The GST was launched last year on the midnight of June 30 and July 1 after a 17-year-long deadlock. The indirect tax regime was criticised for initial teething troubles and too many tax rates. In November 2017, a massive rate rationalisation was done by the GST Council bringing over 200 items in 28% and 18% under lower tax brackets. Speaking on more rate rationalisation in coming days, Vanaja N Sarna said it was a possibility given the revenue buoyancy.

“If you are looking at only 28% being high-valued, there’s definite scope. I’ll have to think in terms of revenue… Tampering with rates in hurry would not appropriate. You should be assured that you are going to get the kind of revenue you are looking at, before trimming the rates,” the CBIC chief told the news channel.

The Narendra Modi government has a couple of things on top agenda in the coming months including the simplification of the returns filing process by introducing single return filing system. But that too is expected to take about a year. After the last GST Council meeting, Finance Secretary Hasmukh Adhia gave a glimpse of the new single return filing system but also said that it would take some time for them to develop a compatible software.

On bringing petrol and diesel under the ambit of the GST, Vanaja N Sarna said that it will happen eventually, echoing Oil Minister’s Dharmendra Pradhan’s view that sooner or later, fuel would be brought under the new indirect tax umbrella.

Do you know What is Wholesale Price Index (WPI), Public Debt, Finance Commission Grants & Other Transfers, Economic Survey, State Finance Commission? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.