GST Structure Rationalization Will Definitely Happen: CEA

Rationalization of goods and services tax rate rate structure is on the government agenda and it is definitely going to happen, chief economic adviser KV Subramanian has said. He said a three-rate structure was important, but there was a need to fix inverted duty structure.

“I think that’s something definitely going to happen,” he said in response to a question on GST structure rationalization. He said the original plan was to have a three rate structure. “But I think what we have to be very cognizant about is that oftentimes with policy making you don’t want perfect to actually become the enemy of the excellent,” he added.

The 15th Finance Commission, headed by NK Singh, in its report has also made a case for GST structure rationalization.

Rolled out in 2017, the GST has subsumed multiple state and central multiple state and central indirect taxes into one. It has five rates currently-0.25%, 5%, 12%, 18% and 28% plus chess on luxury goods. Host of common use items have been exempted from GST.

“GST, the way it got created with actually five rates, was basically excellent because now we are seeing the impact on GST amount that are coming in… the policymakers then must be given credit for actually being practical enough to say, ‘let’s get it going first’ he said at a virtual event organized by industry body Ascham on Thursday.

GST collections in June stood at Rs. 92,849 crores, slipping below Rs. 1 lakh crores in eight months. Collection were for supplies made in May- a month when most states were under different levels of lockdown, reducing business activity, Numbers reflected that the impact of the second wave was not as pronounced as that of the first wave, he added.

“The three-rate structure is something… definitely important and even the inverted duty structure (is) also equally important to actually fix. I think the government is definitely seized of the matter. So we should hopefully see traction on that soon, he said.S-ET

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *