New Delhi, September 29: Days after Union Finance Minister Nirmala Sitharaman revised the Goods and Services Tax (GST) rates on certain products, Chairman of the Economic Advisory Council (EAC) to the Prime Minister Narendra Modi -- Bibek Debroy -- suggested that rather than having five different rates, the government could consider having just three GST rates -- 6, 12 and 18 percent. GST Rates Revised: Hotel Stays Become Cheaper, Caffeinated Drinks Get Costlier; Here's The Complete List of New Tax Rates Announced by Nirmala Sitharaman After GST Council Meet in Goa.
Expressing his opinion on the removing the two GST rates -- zero and 28 percent -- Debroy said, as quoted by Economic Times, "My view is we should have three GST rates: 6%, 12% and 18%. I don’t want both the zero and 28% slabs. The moment I say 6, 12 and 18, we are probably talking about an average rate of around 14% or so."
The Chairman of the EAC stated that the Union government and the GST Council should bring uniformity in the indirect taxes, else the system of taxing products becomes complicated. However, he also, mentioned that direct taxes should vary according to the earning of people.
Stating that GST taxes are paid by consumers and not by producers, Debroy opined that everyone should have been part of this process. Apart from this, Debroy even stated that both the state and Central government should compensate for the revenue loss on a 50:50 basis, as both are equal partners. Economic Crisis Grips Handmade Jewellery Sector, Over 50,000 Bengali Karigars Forced to Return Home Due to Lack of Work.
Though the Chairman of EAC didn't specify how the government should remove GST rates of zero and 18 percent, he made him clear that such step should only be taken after extending the GST chain to small suppliers positioning below the threshold level.