Principal Economic advisor to the Finance Ministry Sajeev Sanyal on Saturday said Goods and Services Tax (GST) slabs may be brought down to three along with the exemption category in order to further simplify the country’s tax regime.
“The lower rate will be five per cent, the middle bracket of 12 and 18 per cent can be combined to a central rate of round about 15 per cent and we might have a top rate of 25 percent,” he said. “The central rate of 15 per cent will be applied for the bulk of goods. We are looking to have a simple tax rate with round figures and most of the goods with the same rate,” he said. Currently there are four GST slabs of 5, 12, 18 and 28 per cent, plus the exempted category which attracts zero per cent GST.
Sanyal said the centre would consider further simplifying the direct tax collection system and reduce the rates if the tax revenues continue to do well. “As the tax system gets simplified, more and more people will be paying their taxes. The tax collection has significantly gone up since the introduction of GST and now a lot of people are paying direct taxes,” he said. So if the direct tax revenues continue to do well, the centre may further simplify the direct tax system, lower the rates and would ultimately move towards the corporate tax rate of 25 percent,” said Sanyal. (IANS)
