As the government is restructuring every possible move to synchronize with the upcoming GST regime, now the center is validating the point to keep the GST rates for a section of the product as neutral as possible will keep the complexity away from the implementation of tax structure. The conclusion can be understood by the example that all types of smartphone or all types of shoes may have a single rate of tax.
A government official also said that “Single rate for one product group will bring simplicity in the structure and make implementation easier.” confirming that the government is trying every possible factor to make the tax rate stable and neutral for all the products. While currently the GST rates are tucked at 4 slabs i.e. 5%, 12%, 18%, and 28% but the experts mention that this multiple tax rate structure will undermine the valuable ability of GST as one tax nation.
Currently, a lot of complex model on the tax rate is prevailing in the country with different tax rates for every product even falling in the same category. The apex body of GST is still figuring to cut short the tax rates for this multiple variation in the taxes rates in the same product range and has come up with the solution to set the rates with a range of product equally. Various daily used products attract a different kind of taxes. Many products like footwear, biscuits, electric lamps, spectacles, smartphones have complex taxation under running for the purpose of grabbing the higher value.
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There is an expectation on this decision as the GST council and other stakeholders are narrowing down on the single tax rate of a particular product type. Bipin Sapra, partner, EY, mentioned that “Uniformity in rates of various products in a commodity group will keep the structure neat and free from classification disputes.” Also another significant person from the industry, Pratik Jain, leader, indirect taxes, PwC said that “Tax based on value or MRP (maximum retail price) of the product would unnecessarily complicate the system and the value itself would need to be revised year after year, have a uniform rate for a particular HSN classification is definitely a good idea… It will be simple, uniform and less litigation prone.”
