The idea of a single tax slab in GST is flawed: Arun Jaitley

The idea of a single tax slab under the goods and services tax (GST) is flawed, said union minister Arun Jaitley in a Facebook note on the occasion of the tax reform’s first anniversary.

“ [Congress president] Rahul Gandhi has been advocating a single slab GST for India. It is a flawed idea. A single slab GST can function only in those countries where the entire population has a similar and a higher level of paying capacity,” wrote Jaitley.

The current GST structure has four tax slabs - nil, 5%, 18% and 28% at which goods and services at taxed.

However, Jaitley said there could be scope, “depending on the collection going up, to merge some of the mid category slabs, but for that we have to see the progress of the new tax regime and the possible upward movement in the collections.”

The minister said the Singapore model of the GST, in which all goods and services are taxed at a uniform rate of 7%, cannot work in India.

In his post, Jaitley also recognised key areas which the GST Council will have to address in the future, including simplification and rationalisation of the rate structure and bringing more products into the GST.

In a separate event to celebrate one year of the GST, Jaitley made an appearance via video conferencing and said “the long-term impact of GST and on India’s GDP growth, on ease of doing business, on expansion of trade and business and make in India and honest trade and business centres, is going to be significant.,” and he was confident that “the best of GST in terms of its contribution to society is yet to come”.