Single GST rate would be better, says economist

gst single rate better arvind virmani

Former Chief Economic Adviser and noted economist Arvind Virmani, who worked initially on the Goods and Services Tax (GST) as the biggest indirect tax reform, is not happy with the government pushing for four different slabs of the new tax rates. He regrets that the rates of 5, 12, 18 and 28 proposed in the GST Council meetings are ‘messier.’

He insists on a single rate across the board and says the government can still do it in the Bills to be brought before Parliament instead of keeping a very high rate of 28 per cent. Instead of categorising items into different tax rates, he suggests that a better alternative would have been to put special surcharges on selected 5-10 items.

Pointing out that a single rate makes accounting very easy as it puts an end to the confusion caused by the multiplicity of rates, Dr Virmani said: “I had recommended retention of a few special sales taxes on specified goods such as liquor, tobacco products, polluting fuels and consumer goods such as cars.”

Free Press Journal, 23 February 2017

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