The 12 and 18 per cent rates under the goods and services tax (GST) may be merged once revenue collections pick up and the top 28 per cent slab would be for a “very thin” list of luxury and sin goods, Indian finance minister Arun Jaitley hinted recently. That would result in two rates, 5 per cent and another ‘X’ per cent to be decided later, he said.
The new regime started with multiple rates to keep the tax incidence around the same level that existed before GST, Jaitley told the HT Leadership Summit in New Delhi. The country would eventually move to a two- tier GST, but that would depend on the revenue position of the government, a news agency report quoted him as saying.
GST has four tax slabs of 5, 12, 18 and 28 per cent. There is also a zero per cent tax on certain essential daily use commodities.
Stressing on the need to reduce the compliance burden on small and medium enterprises, he said that is “a legitimate noise”. (DS)
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