Finance Minister Arun Jaitley hints at further rejig of GST
Finance minister Arun Jaitley on Monday hinted at further rationalisation of the goods and services tax (GST) rates while slamming the opposition who linked rate cuts on about 200 items to the Gujarat elections.
However, a decision on any further cut will depend on the revenues that accrue from the indirect tax reform.
Addressing the media persons the finance minister said that "The tax rate rationalisation process will always continue. In four months we have rationalised the 28 per cent slab. Such rationalisation (will happen in future) depending on revenue buoyancy will take place," he said.
He further said that "there can't be a single rate for GST. This is because the tax rate should depend on the nature of the product."
For example, food items have to be taxed at nil while common man items have to be taxed at the lowest range of 5 percent.
"Luxury goods, sin products, and products hazardous to environment and health can't be taxed at the same rate as aam aadmi product. So, wheat, rice, sugar can't be taxed at the rate as Mercedes car or yacht or tobacco," he said.
Jaitley debunked the Congress' claim that it had forced the government to lower tax on over 200 goods, saying rationalisation of rates was in the works for three-four months and it was "juvenile politics" to link it to any election or political demand.
He added the GST Council decided on the rate cut after the recommendation of the fitment committee. "It is a consensus decision," he added.
Congress has made high tax rates and increased compliance burden in the GST regime an election issue in the run-up to the Assembly elections in Gujarat. It has claimed credit for the rationalising of the rates.
In its last meeting, GST Council decided on Friday to lower the tax rate on 178 items, leaving just 50 items in the top 28 percent rate slab under the Goods and Services Tax.
OneIndia News (with agency inputs)