India is not planning any major rationalisation to rates under its goods and services tax (GST) regime and is also not considering any convergence of the slabs as of now, revenue secretary Sanjay Malhotra has said.
“Rationalisation of rates a continuing exercise but most of the work has already been done on the GST side,” Malhotra told CNBC-TV18 at a post-budget event on February 2.
The GST Council, which comprises the Centre and states, is the apex decision-making body for the indirect tax regime, which was introduced in July 2017.
Almost all recommendations of a group of ministers on rate rationalisation have been taken forward, Malhotra said.
“But apart from smaller changes as of now we don’t have any major agenda insofar as GST rates are concerned,” he added. Asked if the convergence of GST slabs was on the agenda, he said, “Not for the moment.”
Revenue neutral rate
The revenue secretary said that the effective GST rate continues to be below the so-called revenue-neutral rate.
“When GST was being implemented, the revenue neutral rate was thought to be about 15.4 percent but actual experience tells us that in practice over the 65 months… the actual effective rate has only been 11.5 percent.”
Despite that, the indirect tax has seen good buoyancy, he added.
India collected Rs 1.56 lakh crore as GST in January, second only to the record Rs 1.68 lakh crore collected in April 2022. The collections have exceeded the Rs 1.4-lakh crore mark for 11 months in a row now.
Source : moneycontrol.com
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