New Delhi: Amid conflicting reports of an impending restructuring of the goods and services tax (GST) slabs, it is learnt that the central government is keen to have three different slabs of GST from the existing four.
Besides, the government is also mulling a marginal increase in the current GST rates for some key items phase-wise to boost the tax mop-up.
Experts are, however, of view that there should not be more than two slabs of GST in the system.
Talking to Financial Chronicle on condition of anonymity, a member of the apex body of the indirect taxes, Central Board of Indirect Taxes and Customs (CBIC), said, “The government is planning to reduce the number of GST slabs to three from the existing number of four. The final call will be taken by the GST Council soon in the regard.”
“Also, the GST rates of some key items are set to be increased, if not at one go but phase-wise, to boost GST collection for the government. However, it is up to the GST Council to take a final call on the issue and the council is likely to finalise the revised rates within a month’s time,” the source added.
A panel comprising central and state government officials has been formed to review the current rate structure and examine ways to boost revenue collection. “The government is likely review around 150 products that are currently exempt from GST and the GST Council is expected to discuss the panel’s recommendations at its next meeting,” the a finance ministry source said.
In line with media reports, meanwhile, the experts have also favoured the reduction of slabs from the present four. Subhash Varshney, former principal chief commissioner of GST in the Mumbai Circle, said there should be only two slabs of GST rates.
He said less number of slabs would help taxpayers file GST returns easily and help reduce the tax evasion.
The Centre is planning to talk to the state governments after the Union Budget 2021 presentation on February 1. It is also exploring ways to manage a possible revenue shortage and consequent GST compensation to the states from the next fiscal. “The finance ministers of state governments are also expected to meet the finance minister after the Union Budget to discuss the overhauling of GST slabs,” the source said.
Revenue secretary Ajay Bhushan Pandey is learnt to have scheduled a meeting with the tax commissioners on January 7 to discuss ways for streamlining the GST system and plugging leakages. “This meeting with commissioners of state tax and the chief commissioner of central tax will also deliberate about enhancing GST compliance by plugging loopholes and discouraging tax evaders,” the source said.
“Ways to stop tax evasion without any overreach or harassment to the genuine taxpayers will be discussed with the top tax officials and the enforcement wings,” the source added.
As of now, there are four GST slabs of 5, 12, 18 and 28 per cent tax....