Finance Minister Arun Jaitley on Monday said that future of Goods & Services Tax (GST) might limit the slabs to just three – 0 per cent, 5 per cent and standard rate. He also suggested drawing a roadmap to merge two standard rates into one. At present, GST has multiple rates – 0, 0.25, 3, 5, 12, 18 and 28 per cent.
Also, there are two standard rates, 12 per cent and 18 per cent. Along with services, barring those in the negative list, 1,216 goods have been clubbed into these rates slabs. Broadly, 183 products are taxed at zero rate, 308 at 5 per cent, 178 at 12 per cent and 517 at 18 per cent.
Only 28 items, comprising luxury items, AC, cement and auto components mainly, are in the slab of 28 per cent category. “The country should eventually have a GST which will have only slabs of zero, five per cent and standard rate with luxury and sin goods as an exception,” Jaitley said in a blog titled ‘Eighteen Months of the GST.’