Periodic changes in indirect tax rates bring about uncertainty both for the industry as well as the government, Sitharaman said.
Finance minister Nirmala Sitharaman on Sunday said the government has ‘literally’ proposed to the GST Council to consider rationalisation of GST rates once a year and not every three months as was the trend so far. Periodic changes in indirect tax rates bring about uncertainty both for the industry as well as the government, Sitharaman said.
“In GST, you have entered into a certain level of rates. Every change in it leads to refund issues. And therefore, when suddenly for one item the rate of tax is brought down, whole lot of other ripple effects are created and with the ripple effects businesses rightly feel that they are not able to plan how much they have to keep aside for the taxation in a whole year. Similarly, the government has not been able to make an assessment of what it will earn through GST in the whole year — state government and the central government,” the finance minister said.
“We have discussed in the GST Council, and now we literally proposed to the GST Council, not formally, it is a part of our small discussion, we said that can we consider a situation where once a year alone you do any rate rationalisation, reduction or increase. Not every three months,” she said.
Earlier, the finance minister met industry representatives, trade bodies and investment bankers and interacted with them on various themes and provisions in the Union Budget 2020-21, presented in Parliament on February 1.