{"id":217605,"date":"2022-12-08T20:31:40","date_gmt":"2022-12-08T15:01:40","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=217605"},"modified":"2022-12-08T20:31:40","modified_gmt":"2022-12-08T15:01:40","slug":"greening-of-the-gst-the-environmental-dimension-of-taxes-must-rank-high-in-any-rate-rationalisation-exercise","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/greening-of-the-gst-the-environmental-dimension-of-taxes-must-rank-high-in-any-rate-rationalisation-exercise\/","title":{"rendered":"Greening of the GST – The environmental dimension of taxes must rank high in any rate rationalisation exercise"},"content":{"rendered":"\n

Source<\/strong>: The post is based on the article\u00a0\u201cGreening of the GST – The environmental dimension of taxes must rank high in any rate rationalisation exercise\u201d <\/strong>published in the Business Standard <\/b>on\u00a08th<\/sup>\u00a0November 2022<\/strong>.<\/p>\n

Syllabus<\/strong>: GS \u2013 3 \u2013 changes in industrial policy and their effects on industrial growth.<\/p>\n

Relevance<\/strong>: About greening the GST.<\/p>\n

News<\/strong>: As the Goods and Services Tax (GST) has stabilised after the pandemic, it is time for rate rationalisation. This will help in both revenue buoyancy and a simpler rate regime. Further, India can also think of greening the GST.<\/p>\n

What are the various reforms proposed for reforming GST?<\/h5>\n

A committee on Dual Control, Threshold and Exemptions was created by the earlier empowered committee of state finance ministers. This committee recommended a)\u00a0<\/strong>India should move towards a three-tier rate structure. Such as 1)<\/strong> Merit rate <\/strong>at 8%, 2)<\/strong> Standard rate at 16%, and 3)<\/strong> Demerit rate at 30%, b)<\/strong>\u00a0The GST exemptions need to be broadly phased out. Such as including aviation turbine fuel and natural gas in the GST net. India should create a limited list of items under exemptions.<\/p>\n\n\n\n
Read more: Taking stock of five years of GST<\/a><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
What are the other changes required for\u00a0greening the GST?<\/h5>\n

Reform the coal sector<\/strong>: 1)<\/strong> The government should limit the use of cess on coal for GST compensation to states. Instead, the government has to use the amount in pursuing cleaner coal technologies, 2)<\/strong>\u00a0India’s increasing coal demand should be met by deep coal mining instead of open-cast mining. This is because coal from deeper layers emits less carbon dioxide per unit.<\/p>\n

Utilise plastic waste<\/strong>: 1)<\/strong> Incentivise plastic scrap usage in road constructions and establish alternative usage for recycled plastic waste, 2)<\/strong> Create tax incentives, especially GST incentives, for promoting plastic waste recycling, 3)<\/strong> Setting up a technology mission to promote plastic recycling and finding alternative usage for recycled plastics.<\/p>\n

All these will make the policy ban on plastics more effective.<\/p>\n

Promoting renewables<\/strong>: 1)<\/strong> Bringing down the GST rates on a range of components, consumables and spares used by the renewable sector, 2)<\/strong> An expert committee can be set up with the Ministry of Environment, Forest and Climate Change and representations from the Ministry of New and Renewable Energy to jointly provide a green rating for all the equipment that helps in the promotion of the renewable sector.<\/p>\n

How do these changes help in evolving GST?<\/h5>\n

The above changes will ensure that a)<\/strong> The merit rate also has an environmental dimension. Thereby influencing the allocation of resources, and b)<\/strong> Fixing the rate for individual items becomes more transparent and based on broad principles.<\/p>\n\n\n\n
Read more: Has GST reduced inter-state disparities?<\/a><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

India needs to remember that Greening the GST is only a small step in India’s fight against climate change.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source: The post is based on the article\u00a0\u201cGreening of the GST – The environmental dimension of taxes must rank high in any rate rationalisation exercise\u201d published in the Business Standard on\u00a08th\u00a0November 2022. Syllabus: GS \u2013 3 \u2013 changes in industrial policy and their effects on industrial growth. Relevance: About greening the GST. News: As the… Continue reading Greening of the GST – The environmental dimension of taxes must rank high in any rate rationalisation exercise<\/span><\/a><\/p>\n","protected":false},"author":10311,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[10503,216],"class_list":["post-217605","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-business-standard","tag-gs-paper-3","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":1700789403,"cached_date":1704690356},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/217605","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10311"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=217605"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/217605\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=217605"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=217605"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=217605"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}