GST slab rationalisation on cards: CEA

 







The rationalization of the goods and services tax (GST) structure into three slabs by merging two existing slabs is on the cards, and progress should be seen soon, chief economic adviser (CEA) in the finance ministry Krishnamurthy Subramanian said on Thursday.

It’s something that is definitely going to happen. The three-rate structure is definitely important. Even the inverted duty structure that is there is equally important to actually fix. The government is definitely seized of the matter. You should hopefully see traction on that soon,” he said at an event organised by Assocham.

The original plan was to have a three-rate structure of GST, Subramanian said. “However, what we have to be very cognizant about is that often with policymaking, you don’t want perfect to become the enemy of excellent. GST, the way it got created with five rates, was basically an excellent move because now we are seeing the amounts that are coming in. The policymakers must be given credit for being practical enough to say, ‘let’s get it going first’,” he said.

India has four primary GST rates of 5%, 12%, 18%, and 28%. There is also a cess on luxury and demerit goods such as automobiles, tobacco, and aerated drinks. On precious stones and metals, special rates of 0.25% and 3%, respectively, are applicable. A proposal to merge the 12% and 18% slabs into a single rate has been discussed for several years. However, no final proposal on this has been made at the GST Council, which will take a call on it.

If the council approves the merger of the two rates, items such as ghee, butter, cheese, and spectacles may become expensive, while soap, kitchenware and apparel may get cheaper.

In its report tabled in Parliament earlier this year, the 15th Finance Commission (FFC) urged restoring the “rate neutrality of GST”, which was compromised by rate cuts.

If the GST slabs of 12% and 18% are merged to form a new slab somewhere in between, the tax burden on items currently in 12% slab will go up. It remains to be seen how businesses and consumers will respond to this change. On the other hand, tax on items currently at 18% will come down,” said Abhishek Jain, tax partner, EY India.



Join Our Telegram Channel for more updates:https://t.me/praveengst


Comments

Post a Comment

Popular posts from this blog

Centre appeals against ruling on levy of GST on maintenance charges to resident welfare associations

Image
  The Centre has preferred a writ appeal before the Madras High Court against a single judge's order that flat or villa owners paying more than ₹7,500 a month towards maintenance charges to their residents’ welfare associations must pay Goods and Services Tax (GST) at the rate of 18% only for the amount exceeding ₹7,500 and not for the entire monthly contribution. Justices T.S. Sivagnanam and Sathi Kumar Sukumara Kurup on Wednesday allowed an application filed by the Centre to dispense with production of a certified copy of the judgment passed by Justice Anita Sumanth recently and directed the Registry to list the appeal for admission in the usual course. Justice Sumanth had in July this year quashed an order passed by the Authority for Advance Ruling (AAR) on June 21, 2019 as well as a consequent circular issued by the Department of Revenue under the Union Finance Ministry on July 22, 2019 since both of them had insisted upon collecting GST for entire monthly contribution. The jud
Read more

Seven key things to know before filing income tax return (ITR) for FY21

Image
  The last date to file income tax return for the financial year 2020-21 has been extended to September 30, 2021. Although there is more than two months left for the deadline to end, it is always recommended to complete the task as soon as possible and not to wait for the last minute. Worth mentioning here is that the income tax department last month launched a new e-filing portal (www.incometax.gov.in) to speed up the processing of tax returns. The I-T department will soon launch a mobile application, having all the features of the new portal. This year taxpayers have to take care of the following changes in the ITR filing process. 1) A new utility named JSON has been launched for filing tax return forms for FY21. At present, only three forms, ITR 1, 2 and 4 have been released. These new forms will import pre-fill data such as personal details, salary income, dividend income, interest income, capital gains and all the information available in Form 26AS. 2) Taxpayers will have the opti
Read more

Income Tax Return or ITR for FY20 Can Be Filed Till May 31

Image
  n the wake of severe Covid-19 pandemic, the Central Board of Direct Taxes (CBDT) has decided to extend timelines of various tax compliance dates on Saturday. “In view of the adverse circumstances arising due to the severe Covid-19 pandemic and also in view of the several requests received from taxpayers, tax consultants & other stakeholders from across the country, requesting that various compliance dates may be relaxed, the Government has extended certain timelines today," the ministry of finance said in a statement. The move is aimed at mitigating “the difficulties being faced by various stakeholders," it further added. The “relaxations are the latest among the recent initiatives taken by the government to ease compliances to be made by the taxpayers with the aim to grant respite during these difficult times," it mentioned in a notification. “It’s a welcome move to extend the timeline of various tax compliances as the country is struggling with severe second wave
Read more