Taxpayers will surely be happy with the latest announcement of Finance Minister Arun Jaitley about the government is currently working on a single GST rate for most of the goods. It makes sense as India is having one of the most complex GST structures in the world and simplifying is highly required.
In the recent GST Council meeting several goods was moved down from the highest 28 percent slab to 18 percent. If, in future, auto accessories and cement are downgraded in the tax bracket, only luxury goods will remain in the highest slab.
Some states are not happy with the FM announcement as share of GST looks to be not adequate. Punjab said there is now fall of 37 percent in revenue and same version comes from Himachal Pradesh too.
However, Centre need to work upon a backstop facility and compensate the states for three additional years following expiry of initial five years in 2022. This will be a balance for the losses faced.
GST was rolled out in July 2017 and difficulties were seen both by citizens as well as government. Several hiccups were reduced to overcome some obstacles.
By now, it seems, GST is functioning smoothly and been widely accepted too. Removal of goods from top slab has been widely welcomed, but the timing cannot be unnoticed. The move is temptation amid the country is going into polls. The one-GST goal would a perfect agenda for Bharatiya Janata Party during the election campaigns.
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