Arvind Subramanian, Chief Economic Advisor, said moving upward, the GST rate brackets would reduce in number and products like petroleum are expected to come under the ambit of Goods and Services Tax in relation to the collaboration of the states on the issue.
“It will happen in the next few months and years … and done cooperatively,” he responded to a question on when the products like diesel and petrol will bring under the GST and whether States will support such a movement.
The Petroleum Ministry had mentioned the issue in a written format to the GST Council and questioned for diesel and petrol considering under the new indirect tax regime, something that might not descend well in respect to the state government as the VAT is imposed on the fuel is the most revenue generator. In addition, another important imposition on diesel and petrol is the excise duty factor. The inclusion of fuel in the ambit of the GST is possibly overcome the pump price.
One GST Rate Not Possible In India
Mr. Subramanian had mentioned in his statement when he spoke at ‘Economic Policy Making in the Government’ at the ICFAI Foundation for Higher Education, he dictated that it is very hard to maintain one GST rate in India, provided that it will render into taxing necessary goods and luxury products at the same level of tax. But India is going in respect to fewer rates, he further mentioned, “What we have done [is] collapsing the 28% rate so that it will only have items of luxury consumption. Then over time, the 12% and 18% rate [slabs] can probably be collapsed into one rate. We will see fewer rates.”
“As we evolve and get comfortable with revenues, I think we will be looking at further simplification… over the next few months.”
Furthermore, He didn’t say anything about the proposal to change a financial year from April-March to January-December.
