united news of india
New Delhi, Nov 21: Chief Economic Adviser Arvind Subramanian Tuesday made it clear that India won’t have single rate Goods and Service Tax (GST).
Subramanian, in an exclusive conversation with the Economic Times, said that the government may combine the 12 per cent and 18 per cent slabs for GST into one in the near future and reserve the 28 per cent rate only for demerit goods.
The Chief Economic Advisor also made it clear that the country may never move to a single rate GST, a demand that has long been made by the Congress. “In India, we will never get one slab. We have too much of a socialist mindset and for a good reason,” the Chief Economic Advisor said.
He explained the possible tax rates that the GST Council may settle with in future. He said over time there would be three rates — poor man’s rate: 0-5 per cent, a core rate: 12 -18 per cent combination and demerit rate 28 per cent. According to the report, the CEA never liked the 28 per cent slab which he thinks has created some of the transitional challenges.
He further said, “I think we are very close to making 28 per cent just for demerit goods. Zero per cent and 5 per cent has quite a lot of the tax base and there I think we will not be able to make that much progress as we have to protect the poor. But the 12 per cent and 18 per cent, at some point, can be combined in the foreseeable future into one rate.
He said that the land and real estate were on the GST Council’s agenda, but they couldn’t discuss it.
“I think that will happen sooner rather than later. I want electricity to come in very early because it will enhance competitiveness and help meet the ‘Make in India’ objectives,” Subramanian told the ET.
