“List of exempted items that was supposed to be small has expanded substantially, particularly on the services side,” a state government official told ET.” For the purpose to shore up revenues, some services and goods consumed by the ‘affluent’ class are in focus as governments eye revenues. Why does olive oil or fine fabrics such as linen need to be in the 5% bracket?,” said another official adding that some states are not very keen on rate hike fearing impact it could have on consumption slowdown. “There is a design flaw in the GST structure….Tax incidence after GST is lower by 25-30% which has shown its impact on the revenues,” the state government official quoted above said adding that the Centre has already cut corporate tax rate to give relief to companies, which they can pass on to consumers in form of lower prices. As regards the rationalisation of the taxation… too many rates, too many high rates and so on, we are having good conversation with all the states,” Finance Minister had said.
