Chief Economic Adviser (CEA) KV Subramaniam has said that rationalization of GST rate structure is on the agenda of the government and it is definitely going to happen. Besides this, a 3-rate structure is very important and there is also a need to fix the inverted duty structure as far as GST is concerned.
The Goods and Services Tax (GST), which subsumes over a dozen central and state levies such as excise duty, service tax and VAT, was introduced in July 2017. There are currently five rate structures in GST – 0.25 per cent, 5 per cent, 12 per cent, 18 per cent and 28 per cent. Responding to a question, if the rate structure under GST needs to be rationalised, Subramanian said, “I think something is definitely going to happen. The original plan was of a three-rate structure.
But I think we should be very aware that with policymaking at times you really don’t want the perfect to be the enemy of the excellent.” While most items of common use are exempted from GST, 28 Percentage tax is GST, the way GST, the way it was actually created with five rates, was basically excellent because now we are seeing the impact on the amount of GST,” the chief economic adviser said.