Scope for reducing GST slabs, hints FM Arun Jaitley

NEW DELHI: Finance minister Arun Jaitley on Sunday indicated that the government would consider reducing the goods and services tax slabs and easing compliance burden for small taxpayers once revenues from GST better those from the previous tax regime.

“We have a space for improvement eventually once we become revenue neutral to think in terms of bigger reforms such as lesser slab, but for that we have to become revenue neutral plus,” Jaitley said, calling for a bigger presence of the tax to achieve that goal. Revenue neutral structure is that where the government and the states together do not lose any revenue under GST benchmarked to the earlier regime.

Jaitley was speaking at an event organised by National Academy of Customs, Indirect Taxes and Narcotics (NACIN). “To ensure this (higher revenues) we have to certainly ensure larger presence,” he told the 67th Batch of Indian Revenue Service officers and asked them to be “firm and fair” in their duty. The GST has four slabs — 5%, 12%, 18% and 28% — plus zero tax for exempted goods and an additional GST compensation cess levied on certain products above the basic slab.


TRADERS, SMALL BUSINESSES WANT MORE GST RESPITE: POLL




Tax experts consider this a complicated structure that needs to be simplified. The finance minister has now indicated that the compliance burden could be eased on smaller taxpayers. “We are in first 2-3 months (of the GST implementation),” he said. “We have almost by the day, a space and scope for improvement. We have a space for improvement and need for improvement to reduce compliance burden as far as small taxpayers are concerned.”

Jaitley said the burden of indirect taxes falls on everyone, so it is always an endeavour of the government to bring down tax on commodities that are widely consumed. “Direct tax are paid more by the more afflunent, somewhat by the others and certainly not by the weaker section, but the impact of indirect tax place burden is on all,” he said. “Therefore, an effort is always as part of the fiscal policy is to ensure that commodities consumed more by the common people are least taxed compared to others," he said.



Note: The above poll was conducted online, each question received more than 4,000 responses Source: LocalCircles



He said India is a society where there has been a large leakage and a society which did not conventionally mind being tax non-compliant, but is now undergoing a transformational change.

“People are slowly realising the virtues of greater compliance and these virtues of greater compliance have to come with passage of time,” Jaitley said, pitching GST as a change that will help achieve that goal. When people have a right to demand development they also have a responsibility to pay what is required for that development, he said.