Hint of further rejig of GST rates
Finance minister Arun Jaitley on Saturday said the goods and services tax (GST) has stabilised in a very short time and this provides an opportunity to widen its base and further rationalise the rates in the future.
- Published 28.01.18
New Delhi: Finance minister Arun Jaitley on Saturday said the goods and services tax (GST) has stabilised in a very short time and this provides an opportunity to widen its base and further rationalise the rates in the future.
The GST has brought about an entire change in the indirect tax system in the country, he said and added that the new tax system has "stabilised in a very short time in India" compared with various other countries.
"Therefore, it gives us an opportunity in the times to come to increase its base and rationalise the structure as it continues to evolve," he said at an event to mark the International Customs Day.
At present, the GST has four rates of 5 per cent, 12 per cent, 18 per cent and 28 per cent. There are two special rates of 0.25 per cent for rough diamonds and 3 per cent for gold.
In the November meeting of the GST Council, it was decided to keep only sin goods and white goods under the 28 per cent tax bracket and 178 items were moved from the highest tax bracket to 18 per cent.
Thirteen items were moved from 18 per cent to 12 per cent bracket; 8 items from 12 per cent to 5 per cent; 6 items from 18 per cent to 5 per cent, while 6 other items moved from 5 per cent to zero per cent slab.
Following the reduction on more than 200 items, the GST collections hit the lowest level in November at Rs 80,808 crore.
However, reversing two months of decline, collections gathered momentum in December, rising to Rs 86,703 crore.
Total GST collections in October were over Rs 83,000 crore. In September, the GST mop-up was over Rs 92,150 crore.
Ease of business
The finance minister has said India needs to get its act together in three key areas if it wants to leap up the World Bank's rankings charts on Ease of Doing Business.
The three areas where India is flagging are: municipal permissions for land and buildings, trading across borders, and contract enforcement. India has leapt to 100 from 142 and Prime Minister Modi has set a goal to break into the top 50.
But Jaitley admitted it wasn't going to be easy to improve performance in these three areas.
"Each one of these has a number of minute details which we need to satisfy and most of them are not very difficult to satisfy," he said.
The World Bank's rankings have turned controversial earlier this month after the Bank's chief economist Paul Romer raised questions about changes in methodology that might have contributed to Chile's decline in its position.
The Ease of Doing Business 2018 report was released last November. India was ranked 100th among 190 countries in the global list for 2018, jumping 30 spots.
Chile, which currently ranks 55th, came down from its 34th position in 2014. In 2015, the country was ranked 41st, 48th in 2016, and 57th in 2017, according to the World Bank report.
The Bank has said it will conduct an external review of Chile's indicators in the annual Ease of Doing Business competitiveness rankings in light of Romer's remarks.
Finance secretary Hasmukh Adhia said: "All of us together have to work harder to ensure that our ranking in that particular item (trading across borders), which is 146 as of now, improves... we must make it within 100 as early as possible. If not within a year, within two years."
Adhia asked the officials to take this as a challenge and focus on this during the year.
"If we are used to getting so many laurels in terms of the GST and other things, why can't we make this also possible. I am sure if you all decide, we can do it," he said.
Jaitley also said that the Department of Industrial Policy and Promotion was working on the improvement in the three laggard parameters.