levels itself, then the second stage of reforms will be
consolidation of other rates. We have two standard rates
and in the long run, I do see them merging into one. For
that to happen, it will take some reasonable time when
the compliance levels start moving up.”
Jaitley said luxury goods can’t be taxed at a lower rate
of 5 per cent and hence, the need for differential
rates. “We have a very large number of items, food
items, which are taxed at zero, economically less
affluent people are taxed at 5 per cent. Luxury goods
can’t be charged at 5 per cent. There has to be a
differential rate in a society with economic disparity
like India,” he said.
Hinting at the GST returns simplification process, the
finance minister said that the government is working on
making compliances simpler, adding that “it’s almost in
the final stages of its preparation.” He said that has
to be “linked with the larger objective of moving up the
compliance levels itself under GST”.
Since the finalisation of tax slabs in June last year,
the GST Council has so far rationalised rates four times
— June, October, November and January this year. The
government had earlier flagged the low compliance rate
under both direct taxes and under GST, especially for
dealers under the GST’s composition scheme. Only 7 lakh
out of 10 lakh registered composition dealers had filed
returns for the first quarter of the GST regime.
On economic growth, Jaitley said that India has the
potential to overshoot 7-8 per cent growth rate
accompanied by policy changes and supportive global
environment. “Most in India believe that a 7-8 percent
growth rate is an absolute normal as far as India is.
But the real potential of India is to beat that. And
therefore with policy changes accompanied by a
supportive global environment, India perhaps has the
potential to achieve little more than that,” Jaitley
said.
Source::: The Indian Express,
dated 28/02/2018