GST Slabs Might be Reduced to Two by the Government in Near Future

GST Slabs Might be Reduced to Two by the Government in Near Future

Bengaluru: The Centre is planning to slash the number of GST rate slabs from the present five to two in the near future, according to AK Jyotishi, Principal Chief Commissioner of Central Taxes, Bengaluru Zone.

While delivering the inaugural address at Workshop on GST: Practical Requirements and Challenges organized by Bangalore Chamber of Industry and Commerce (BCIC), he said that the thinking is guided by the fact that 90 per cent of the taxes come under the 18 per cent rate slab.

Since the launch of GST, the government has cleared a lot of misconception among taxpayers about the new indirect tax law. “GST is not a disruptive law but a transformational law. As the law is maturing, the industry, which initially had inhibitions and doubts is now voluntarily complying with the law,” he said.

“We do accept the fact that, GST initially had several glitches and had created complexity in complying with it, but now a sizable chunk of the hitches stands removed.”

The Principal Chief Commissioner said by a word of caution: “There is an impression that tax assessees can get away by not complying with GST law in the garb that the Department is still using manual methods. But let me flag you, after the initial handholding and a go-slow attitude, which was deliberate, we now have all the wherewithal to track tax defaulters and will act with a stern hand if taxpayers continue to default.”

The government is using data analytics and the defaults have already been detected, he said.

Explaining how simple and plain the GST law is Jyothishi cited an example of a credit card seller and how he forced him to buy the card despite his strong reservation. “After initial no-no, I was coaxed to take the credit card. After reaping the benefits of the Credit Card, I was overwhelmed by the benefits and the ease of transaction. Similarly, GST may look complex initially, but let me tell you that once you begin to adapt to the new law, operations will be as simple as sending an SMS to the Department,” he said.

Jyothishi said that as per current records there are 8 lakh assessees (3.4 lakh Central Government monitored and the rest by the State). The Department collects on an average Rs. 6,500 crores every month. The Tax base has increased from 60 lakh crores to 1.10 crores. Basically, the increase is due to voluntary compliance and also some sectors, hitherto left out, have now come under the GST gambit.

BCIC president Kishore Alva said despite a few drawbacks the industry is facing due to the new tax legislation, the business community must celebrate the landmark reform. “At the same time, we also must acknowledge that it is only half the job done, as far as tax reform is concerned. We have a long way to go.”