GST Rates: Optics and Revenue Overriding Priority

Photo: Courtesy The Financial Express
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The Centre’s move to further carry out rationalisation of the tax rates of items under the GST regime has evoked subtle criticism from The Hindu.

In its edit piece on Tuesday, the paper has argued that frequent tweaks to the structure, and an impression that rates can be altered by lobbying the powers-that-be, risk ruining the promise the GST held for investors wary of India: a predictable, simple and stable tax regime.

That the original rates were neither thought-through nor reviewed prudently is apparent with the Council’s decision to reduce the 28 per ent levied on disabled persons’ carriage parts and accessories to 5 per cent, it said.

The overriding priority seemed “revenue and optics” than the nature of the goods or services to be taxed, the paper said as it highlighted the GST council’s resistance in removing Cement and auto parts from the highest of 28 per cent slab. Cement yields Rs 13,000 crore in GST and auto parts another ₹20,000 crore to the Government.

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