Cement is one of just two items “of common use” still in the 28 per cent Goods and Services Tax (GST) slab, and the Modi government’s next priority is to move it to a lower bracket, Union Finance Minister Arun Jaitley said today.
“All other building materials have already been transferred from 28 per cent to 18 per cent and 12 per cent [slabs]. The sun is setting on the 28 per cent slab,” Jaitley wrote in a Facebook blog post.
India should eventually have just GST slabs of zero, 5 percent and a “standard rate with luxury and sin goods as an exception”, he said.
This comes within days of the GST Council revising downwards the rates of 23 items leaving only 28 items in the highest category of 28 per cent.
“A future road map could well be to work towards a single standard rate instead of two standard rates of 12% and 18%. It could be a rate at some mid-point between the two,” he wrote. “Obviously, this will take some reasonable time when the tax will rise significantly,” he continued.
Those who oppressed India with a 31% indirect tax and consistently belittled the GST must seriously introspect. Irresponsible politics and irresponsible economics is only a race to the bottom.
— Arun Jaitley (@arunjaitley) December 24, 2018
Attacking Congress, Jaitley said that’ “Those who oppressed India with a 31 per cent indirect tax and consistently belittled the GST must seriously introspect. Irresponsible politics and irresponsible economics is only a race to the bottom.”
On the GST revenue collection which has come under criticism as the government had set a target of collecting one lakh crore rupees monthly, Jaitley said, “This increase in the tax collection has to be factored keeping in mind the significant rate reduction which has taken place in the GST. The reduction in monetary terms amounts to about Rs.80000 crores per year. Notwithstanding the substantial tax reduction, the GST collection in the first six months of this year has shown a significant improvement as compared to the first year. The average monthly tax collected in the first year was Rs.89700 crore as compared to Rs.97100 crore per month in the second year.”
“India probably had the worst indirect tax system anywhere in the world. Both the Centre and the State Governments were entitled to levy a set of taxes. There were 17 taxes levied. An entrepreneur, therefore, faced seventeen inspectors, seventeen returns and seventeen assessments,” tweeted Arun Jaitley.