New Delhi: The central government is once again planning to change the structure of the Goods and Services Tax (GST). Krishnamurthy Subramanian, Chief Economic Adviser in the Ministry of Finance said that soon by merging 2 slabs, the exercise of keeping only three rates in the GST structure is going on. He said that this change definitely has to happen. It is very important and important to have a three-rate structure in GST. Therefore, the central government will definitely take a decision on this matter soon.
‘Because of 5 rates, every month has got a strong collection’
Subramanian said in an ASSOCHAM program that the real plan was to have a three-rate structure in GST. However, later it was introduced with five rates, which was a great move by the Central Government. He said that due to having 5 rates in GST, the amount of collection becomes very large. Policymakers initially planned to introduce GST first along with 5 rates. At present, there are four main rates in GST of 5, 12, 18, and 28 percent. Along with this, there is also a cess on products like automobiles, tobacco.
What will be cheaper and on whom will you have to pay more
The Chief Economic Advisor said that a special rate of 0.25 percent on precious stones and 3 percent on precious metals is applicable. He said that there is a proposal to merge the rates of 12 and 18 percent. As soon as these are merged, there will be a system of 3 rates structure in GST. Discussions have been going on among policymakers on this issue for many years. However, till now no final proposal on this has been presented in the GST Council. If the council approves the merger of both the rates, then ghee, butter, cheese, and glasses will become expensive. At the same time, kitchenwares and clothes will become cheaper.
Jaitley and FCC had talked about merger of rates
In a report tabled in Parliament earlier this year, the 15th Finance Commission (FCC) had also urged the government to merge the rates of 12 and 18 percent so that there are three rates in the GST structure. Apart from this, former Finance Minister Arun Jaitley had also talked about merging the two slabs. He wrote in his blog in December 2018, ‘Instead of two standard rates of 12 and 18 percent, a standard rate can be designed. It can also be done that a rate between these two is offered. Product prices will increase. At the same time, the prices of items with the rate of 18 percent will be reduced.
