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New Delhi, October 16
The number of goods in the highest 28% GST slab would be brought down and a committee of officers will calculate the revenue impact before going in for further reduction in tax rates, Revenue Secretary Hasmukh Adhia said today.
“It is required, the fitment of rates which has happened is mainly based on excise and VAT,” he said when asked if the GST Council is considering pruning of the number of items in 28% tax bracket.
GST has subsumed over two dozen taxes and has transformed India into a single market for seamless flow of goods and services. All goods and services have been fitted in the four-tier GST rate structure of 5, 12, 18 and 28%.
Adhia said while fitting the goods and services in various tax bracket, the GST Council has taken into consideration only the excise duty and VAT rate applicable on those items prior to GST.
“There are industries where 95% of production used to take place in MSME and all of them used to avail excise duty exemption. So that means the excise rate we have taken for that item is only theoretical in nature and actually we have done a substantial increase in the rate of that item.
“That way it is being pointed out that it is a theoretical rate which has been derived, there is a need for rationalisation. Instead of doing a piecemeal reduction here and there, we do need to look at the entire rate of 28%,”Adhia said at a GST Townhall organised by CNBC TV18.
“The fitment committee will have to look at how much revenue we got from these items from excise and VAT earlier before we agree to any further wholesale reduction of rates. If we find that revenue reduction is too much, we may have to do that in stages,” he said.
Adhia also said that in the last 30-40 days glitches faced by GST Network software has reduced and there would be no leniency shown on businesses for delayed filing of returns. — PTI
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