The Fifteenth Finance Commission (FFC) has recommended simplifying the GST structure into three slabs, according to a report in Hindustan Times.
The Finance Commission has suggested a uniform rate of 17 percent, sources told the publication. GST, introduced in July 2017, currently has four rates – 5 percent, 12 percent, 18 percent and 28 percent.
Other suggestions by the panel include a lower merit rate for items of common consumption and a higher rate on luxury and sin goods, the report said.
Moneycontrol could not independently verify the story.
The Finance Commission has forwarded the suggestions to the GST Council, which makes the final decision on the rates, Hindustan Times reports.
Some policymakers are in favour of rationalising the slabs to simplify the GST structure and boost revenue collections, which have recently seen a slump.
GST collection had crossed the Rs 1 lakh crore mark in November 2019 after three months of lower collections.
Finance Minister Nirmala Sitharaman also recently said there was a need to rationalise GST rates.
“Eventually, we will of course have to rationalise (the rates). Do we want so many slabs? Do we want to have just two or three slabs? Original intent was that we have just the three —merit, sin and the standard; just the three rates,” Sitharaman had said.
In another report in The Economic Times, the government is considering allowing companies to clear current GST dues without first clearing past pending payments.
Officials from the Ministry of Corporate Affairs (MCA) and Department of Revenue (DoR) have begun discussing the matter, the report said.
XaTTaX is Best GST Software, Simplify your Financial matters with GST eFiling Software for Return Filing & GST Billing Software in India.
- Automate Invoicing and get Paid Faster
- Integration with all popular accounting software
- Manage your GST and E-WayBill Software anytime anywhere using multiple devices
Get Our GST Software DEMO and E-WAY BILL DEMO for FREE