Scope for reducing GST slabs, hints Arun Jaitley

Oct 02, 2017, 10:44 IST | Agencies

However, the finance minister says this can only happen when India becomes revenue neutral

Union Finance Minister Arun Jaitley yesterday hinted that there was scope for lesser slabs under the recently implemented Goods and Services Tax (GST) once there is revenue buoyancy.

Arun Jaitley, finance minister
Arun Jaitley, finance minister

"We are in the first 2-3 months (of GST implementation). We have scope for improvement. We have space for improvement and need for improvement to reduce compliance burden as far as small taxpayers are concerned," he said.

"Once we become revenue neutral, we can think in terms of bigger reforms, such as lesser slabs, but for that we have to become revenue neutral...," he said at an event organised here by National Academy of Customs, Indirect Taxes and Narcotics (NACIN).

Currently, the GST regime slots items under rates of 5, 12, 18 and 28 per cent. An additional GST compensation cess is also levied on certain products.

Tax burden
Emphasising that indirect tax burden is borne by all sections, the minister said it was always the endeavour of the government to bring down tax rates on mass consumption commodities.

"Direct tax is paid by the more affluent, somewhat by the others and certainly not by the weaker section, but the impact of indirect tax places burden on all.

"Therefore, an effort is always as part of the fiscal policy... to ensure that the commodities that are consumed more by the common people are least taxed compared to others," he said.

'Responsibility to pay'
Noting that India has conventionally been a tax non-compliant society, he said when people have the right to demand development, they also have the responsibility to pay what is required for the development.

Addressing the 67th batch of Indian Revenue Service officers, the finance minister said revenue was the lifeline of governance and all the developmental activities. "You don't have to extort taxes from those who are not liable to pay... as tax people, you are not entitled to invite fear, you have to invite a respect that you are somebody who (wants) people to comply with national duty," he said.

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