India's chief economic advisor Arvind Subramanian said Goods and Services tax (GST) may probably have fewer rates in the future after "collapsing" the 12% and 18% tax slabs into one.
He said over time, rates could be collapsed further, leading to much fewer rates. He reasoned that having just one rate is "too difficult to achieve."
What else did he say? Read on!
Currently, GST has five tax slabs: 0%, 5%, 12%, 18% and 28%. Earlier this month, the GST council had shifted 178 items from the 28% to the 18% slab. Over a period of time, they plan to keep only luxury items in the 28% slab.
Subramanian termed GST implementation a "transformational fiscal reform" that the country had never seen before.
He admitted that there were technical glitches as "the centre and every state has its own tax officials and own IT system." This led to complications. He confessed that these issues could have been handled better.
But, he now expressed confidence about the GST council addressing these issues.
Subramanian, while talking at the ICFAI Institute of Higher Learning in Hyderabad, expressed hope about GST, which was rolled out amid fanfare in July'17. He claimed that the system will stabilize in the next 6-9 months, making it a "model" for other countries to "emulate."
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