Arjun Meghwal in Calcutta on Saturday. Picture by Pradip Sanyal
Calcutta, Aug. 12: Revenues collected by the government under the goods and services tax regime could be a key parameter in future rationalisation of rates under the indirect tax system rolled out in July.
At present there are four tax rates under the GST - 5, 12, 18, 28 per cent on different categories of goods and services in addition to the exempted category and special rates for gold and rough diamond.
Union minister of state for finance and corporate affairs Arjun Meghwal today said the GST Council could take a call on the tax rates depending upon its impact on revenue collection.
He was addressing meetings at different chambers of commerce in Calcutta as part of the outreach programme of the Centre to identify issues following the rollout of GST.
The debate over the future rejig of rates comes at a time when the government has received representations questioning the logic of having a multiple-rate GST structure.
In response to a question raised in Parliament recently, Union minister of state for finance Santosh Kumar Gangwar had said multiple rates had been prescribed based on the recommendation of the GST Council keeping in view the pre-GST tax incidence.
The second volume of the Economic Survey 2016-17, however, has noted that despite having multiple rates, the GST was less complex than the structure it had replaced.
"Much of the commentary has suggested that the GST has a complicated tax structure, implicitly comparing the new system with an ideal GST tax structure, while implying that the comparison is with the past. It is inaccurate to suggest that the GST is more complicated than the system it replaced, for two related reasons.
"Previously, every good faced an excise tax levied by the Centre and a state VAT. There were at least 8-10 rates of excises and 3-4 rates of state VATs, the latter potentially different across states. So, a structure of multiple rates has been reduced to a structure of 6 rates," the survey said.
"More important, uniformity or the principle of "one good, one tax" all over India is now a reality. Previously, different states could impose different taxes on any given product and these could be different from that levied by the Centre. So, relative to the past, there is now uniformity rather than multiplicity as well as considerably less complexity," it added.
Meghwal today expressed confidence that based on the trends in registration, the tax base is set to increase, which would have a positive impact on revenue collection. "Around 13.2 lakh new dealers have been added and within that 56,000 registrations have come from Bengal," said Meghwal.
He added that the government has formed a revaluating committee consisting of 30 ministers and 180 officers to address the same.