New Delhi : Outlining the future roadmap of Goods and Service Tax, Finance Minister Arun Jaitley Monday said that the country is moving towards a single standard rate instead of the current 12 per cent and 18 per cent tax slab. In a Facebook post titled ‘Eighteen Months of GST’, Jaitley said 28 per cent tax slab would soon phase out except for luxury or sin goods and that the standard rate could be a mid-point between 12 and 18 per cent. Adding that the standard single rate would take some time to implement, Jaitley wrote, “The country should eventually have a GST which will have only slabs of zero, 5% and standard rate with luxury and sin goods as an exception.”
Jaitley credited GST for unifying the Indian market and breaking the interstate barriers. “With the goods and services tax (GST) transformation completed, we are close to completing the first set of rates of rationalisation i.e. phasing out the 28 per cent slab except in luxury and sin goods,” he said. The 28 per cent slab is now a dying slab,” he said. Currently, 28 items, including luxury and sin goods, auto parts, dishwashers, AC and cement remain in the highest slab of 28 per cent.
Stating that only cement and auto parts are items of common use which remain in 28 per cent slab, Jaitley said the next priority will be to transfer cement into a lower slab. “All other building materials have already been transferred from 28 per cent to 18 per cent and 12 per cent. The sun is setting on the 28 per cent slab,” he added.
GST was implemented in India on July 1, 2017. Of the 1,216 commodities which are used, broadly 183 are taxed at zero rate, 308 at 5 per cent, 178 at 12 per cent and 517 at 18 per cent.
Taking a dig at the Congress, Jaitley wrote, “The Congress legacy of indirect tax was a 31% tax. We transiently put them in the 28% slab. 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.”
The GST council cut rates on 23 goods and services in the 31st Council meet held on Saturday. With this latest round of rate reduction, 97.7 per cent of the 1,211 items under the GST now fall in tax slabs of 18 per cent and below among the five broad categories of zero, 5, 12, 18 and 28 per cent.