Finance Minister Arun Jaitley has hinted at further GST rate cuts in future depending on "revenue buoyancy", while hitting out at the opposition for linking last week's decision to lower rates on 178 items with the upcoming Gujarat elections.
Finance Minister Arun Jaitley has hinted at further GST rate cuts in future depending on “revenue buoyancy”, while hitting out at the opposition for linking last week’s decision to lower rates on 178 items with the upcoming Gujarat elections. “In 4 months we have rationalised the 28 per cent slab. Such rationalisation (will happen in future) depending on revenue buoyancy will take place, ” PTI quoted Arun Jaitley as saying.
“Rationalisation process in the transition will always continue. So, wherever there is scope for improvement and procedural simplification will always continue,” the Finance Minister added. The GST Council, which is headed by Arun Jaitley, brought down tax rate on 178 products from 28% to 18% and pushed down several others in the lower bracket, and decided to bring down compliance burden.
Explaining the rationale behind not adopting the single tax system, Arun Jaitley said it was not fair to put luxury or sin items under the same tax umbrella as food. “Luxury goods, sin products and products hazardous to the environment and health cant be taxed at the same rate as aam admi (common man) product. So, wheat, rice, sugar cant be taxed at the rate as Mercedes car or yacht or tobacco.”
The Finance Minister also acknowledged problems faced by traders and businessmen while filing returns on GST Network and said, “You only have to address software (issue with the filing of the tax return). I think there is already a net advantage in the medium and long-term, smooth and a larger market and revenue buoyancy.”
Currently, the GST regime slots items under four primary tax rate slabs — low rate of 5%, standard rates of 12% and 18%, and high rate of 28%. Other than this, gold and jewellery are taxed at a concessional GST rate of 3%, while rough diamonds are having a 0.25% levy. The items of daily use have been kept tax-free, ie, either at zero tax rate or completely out of the ambit of tax under GST. Apart from this, an additional cess varying for item-to-item is levied — as in case of cigarettes and luxury cars — on sin and luxury items.