‘Convergence of certain tax rates may be taken up later’
NEW DELHI Finance minister Arun Jaitley on Saturday said that tax rates of certain goods, which come under the 12% and 18% brackets, could be converged at a later stage. While there has been a demand for a single or two rate slabs under the GST, Jaitley said it was not possible to implement this structure immediately.
“That is not possible now. We can converge some tax rates in the future.. (goods that come under) 12% and 18% can be converged into one…but if we make a single rate of 15%, then food items will be hit,” the minister added. He said the GST will end the inspector raj while weeding out black money.
Taking a dig at some of the Opposition parties that decided to boycott the GST launch, Jaitley said there was no need for any apprehension over the implementation of the new tax structure. “No one needs to fear it..some people were afraid and they distanced themselves,” he said. Jaitley, speaking at function organised by the Institute of Chartered Accountants of India (ICAI) on Chartered Accountants Day, said equality in taxation policy is critical. While direct tax is progressive indirect tax is regressive, he said, adding that both the poor and the rich have to pay the same price for a particular product.
“I am fully confident the step will be beneficial,” he said.
Meanwhile, senior Congress leader and former finance minister P Chidambaram on Saturday said the new reform in present form will put a burden on the common man and hugely affect small, medium and micro businesses and entrepreneurs while being inflationary with multiple rates.