The finance minister, Arun Jaitley, showed the concern for common people in understanding the different slabs in the new indirect tax in India summit organised by The Economist in New Delhi. Further, he explains that due to the new tax system implication from 1st of July, it is not possible to change the slabs frequently else it will be onerous for assiduous people.
The suggestion is likely as GST Council may show interest in confronting the situation and planning to come down the rates of 12% and 18% into one slab.
The decision to make changes is aligned with the newly formed GST Council, the first federal institution, which is facing the challenges right now and it needs time to settle down. So the issue will be judgemental only after considering the inflation effects over the economy.
Excusing about the current rates Jaitley said the different slabs are purposefully put because of the diversity in our economy where purchasing luxury items and day-to-day food are two different aspects. As the economy shows variableness, including all items in one slab, will be having counter-effects on common people.
Favouring the current slab he explained most of the items are tried to put in 5% and 12% tax rate so that it can overcome the inflationary issues. As the new indirect tax system is expanding the tax wideness, we can expect the good effects on the economy and invest the collected money in different development schemes.
Finance minister also paid attention to demonetisation and gave it credit to put our economy in the formal economy.
Remarks:
Overly finance minister showed the good side of GST and its implication and left the decision on future circumstances coming to GST Council to collapsing the standard rates of 12% and 18% into one slab.
