12% and 18% GST rates will be merged soon. Know more.

The government may soon merge GST slabs of 12 and 18% and will keep the slabs of 28% only for demerit goods. Chief Economic Advisor Arvind Subramanian has said this. He said that there can never be a single GST rate in the country.

Chief Economic Advisor Arvind Subramanian said that there can never be a single GST rate in the country, but over time a slab of 0 and 5%, a slab made up of 12-18% and a demerit slab of 28%. He said this in a 90-minute conversation in the office of our associate newspaper Economic Times. He said that cement and white goods do not fall in the demerit category, but the Center is delaying in taking decisions about them, taking care of the state exchequer.

The Chief Economic Advisor last year proposed a revenue neutral rate of 15.5%. He said that the GST collections have not deteriorated and the government will get an idea of the overall fiscal situation in a few weeks. He told, ‘We are moving in the right direction on the structure of GST. I have never liked a slab of 28%, but it has been built for some time. I think we will charge only tax 28% on demerit goods. There is a large tax base between 0 and 5% and we have to protect the interests of the poor, so there is not much progress in this case. However, the slabs of 12 and 18 percent can be added later and a rate can be fixed instead.’

Subramanian, who has studied from IIM Ahmedabad and Oxford, said a slab for GST is not possible in India. The mindset of the country is socialist and it has a legitimate reason as well. He said that land, real estate and natural gas could soon be brought under the purview of GST. He is also entitled to bring electricity in it soon.

As per the most recent Finance Commission, the compelling tax rate under GST remains at 11.8 percent as per the International Monetary Fund and 11.6 percent as per the Reserve Bank of India. This rate is significantly lower than 14 percent, the normal income impartial rate (RNR) that was needed for a smooth change from the value-added tax regime without any revenue loss.

The GST incomes reached a record high of Rs 1.19 lakh crore in January and Rs 1.15 lakh crore in December with an improvement in the financial action and requirement. The public authority will likewise hope to address the inverted duty structure in specific things like materials, footwear and manure among others in March