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- Former Finance Minister has said that India can have two slabs for the Goods and Services Tax(GST) but dismissed the possibility of a single rate.
- He said that single GST slab would be possible only in extremely affluent countries where there are no poor people.It would be inequitable to apply a single rate in countries where there are a large number of people below the poverty line.
- Further,he explained that Direct taxes were progressive as those who earned more paid more tax.While Indirect taxes were regressive in this regard since the rate on the same products is the same for the rich and the poor.
- He also said that as many as 20 states are already showing steady increase in revenue collections and they do not require the centre to compensate them for revenue loss arising out of GST implementation.
- The Centre had promised full compensation to any State suffering a loss of revenue due to the GST for five years assuming that their revenue would have increased by 14% every year without the tax.
- GST (Goods and Services Tax) is an indirect tax that has replaced many Central and State taxes like excise duty, VAT and service tax.It is a single comprehensive tax levied on all goods and services produced in India as well as those imported from other countries.
- GST is applied to all goods other than crude petroleum,motor spirit, diesel,aviation turbine fuel and natural gas and alcohol for human consumption.There are four slabs for taxes for both goods and services which are 5%,12%,18% and 28%.
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