Giving hint of further rationalisation of goods and services tax (GST) rates, Finance Minister Arun Jaitley has said that there is scope for further rationalisation of GST rates and revenue buoyancy will decide the course of rationalization. He also ruled out single tax rate of GST, saying those seeking single rate have no understanding of tariff structure.
Brushing aside the charge of GST rate rationalisation with elections or political demand, the Finance minister said that it was “juvenile politics” to link the reduction in rates to the state assembly polls. He added that the decisions in the GST Council are “all consensus decisions” and the body has been pragmatic and not rigid.
Jaitley said that with the rate cuts, the government is expecting the gains on a host of products- from cosmetics and razors to washing powder - to be passed on to consumers. He added that GST has brought down inflation. 'This actually reduces inflation. This is one of the advantages of a more efficient tax system... Effectively, today, almost all items in the goods category are better off than they were prior to July 1.'
Earlier in the biggest GST rejig yet, tax rates on over 200 items, were cut by the GST Council, to provide relief to consumers and businesses amid economic slowdown. As many as 178 items of daily use were shifted from the top tax bracket of 28 percent to 18 percent, while a uniform 5 percent tax was prescribed for all restaurants, both air- conditioned and non-AC.