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Will soon streamline GST regime for all assessees: Nirmala Sitharaman

Will soon streamline GST regime for all assessees: Nirmala Sitharaman

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Finance Minister Nirmala Sitharaman on Saturday said the government is working on streamlining the goods and services tax (GST) regime to eventually have three slabs.

Though any decision related to tax rate cut will be taken by the federal indirect tax body GST Council , the minister said “eventually we need to rationalise (rates). Do we want more slabs? Do we want to have just two or three slabs. Original intent was that there will be three slabs—merit, sin and the standard”.

Currently, there are four key tax slabs—5%,12%,18% and 28%—under the new indirect tax regime that was rolled out on 1 July 2017.

The council will meet later this month to discuss various revenue improving measures including changes to GST rates and cess levied on select goods. It will be the first meeting ever in which tax rate increases will be considered. At the last GST Council meeting in September in Goa, there was a token increase in the tax rate on one product, signaling that the era of GST rate reductions was over.

The government’s plan to review tax rates, exemptions and cess comes amid a shortfall in revenue receipts of the central and the state governments, where the latter has accused the Centre of delays in compensating states for their GST revenue shortfalls. The proposed meeting will also consider ways to improve tax compliance.

The minister further said the government will remove any distortions pertaining to the issue of inverted duty structure as far as rates are concerned and will simplify the system of filing returns under GST.

Sitharaman also said the government is committed towards paying compensation to the states for their revenue shortfall. Finance ministers of four states and officials from four other states urged the Centre to clear dues towards compensation from the implementation of the GST as they are facing financial difficulty.

“Unfortunately, in the last collection the cess component has not been so adequate… That’s not to the level of saying that oh, the compact has been broken,” she said.

“The cess fund if it is there, we are going to give it. If it is not there, we are also makig clear to ourselves as to how we can do it. We are not going to touch the compact… Let there be no doubt. We will honour compact, there is no question about it, she said, adding that states’ issue is genuine.

Source: Live-Mint

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Single GST Rate Not Possible In A Country Like India: Piyush Goyal

Single GST Rate Not Possible In A Country Like India: Piyush Goyal

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Union Finance Minister Piyush Goyal today said that the proposal of some political parties for a single GST rate slab was a “ridiculous suggestion”.

Some political outfits had been clamouring for doing Single GST Rate Not Possible In A Country Like India: Piyush Goyalaway with the four-slab Goods and Services Tax (GST) rate structure and the Congress had promised to reduce it to one slab if voted to power in 2019.

“One rate of tax is a ridiculous suggestion. It would be a burden on the poor and the middle class if items of daily use like salt, sugar, and clothes were taxed at 18 per cent,” Mr Goyal said at an Indian Chamber of Commerce event in Kolkata.

He said that the past Congress-led UPA government had proposed a 18 per cent single GST slab looking at the tax collections and concessions given to the poor.

“The rate proposed earlier would not have been accepted. Also, the GST structure would not have worked,” Mr. Goyal, who also holds charges of coal, railways and corporate affairs ministries, said.

Mr. Goyal has been looking after the finance ministry owing to Arun Jaitley’s indisposition.

“How is it that Mercedes Benz and aircraft becoming cheaper by a single rate. This would have been the worst for of governance,” he said.

However, Mr. Goyal said rates of 328 items out of a total of 1,200 had been reduced after the implementation of GST in July last year.

“What stops us from the elimination of slabs or further reduction in rates on more items is if all the taxpayers pay their taxes,” he asked. India could really be a low tax nation, he said.

Source: NDTV