Hawai chappal, Mercedes can't have same GST, rationalisation of slabs needed: Jaitley

New Delhi: Senior BJP leader and ex-finance minister Arun Jaitley on Monday said that goods and services tax (GST) a Hawai chappal, Mercedes can't have same GST rates though he emphasised that rationalisation of slabs are required.

“Hawai chappal and a Mercedes car cannot be taxed at the same rate. This is not to suggest that the rationalisation of slabs is not needed,” Jaitley wrote on Facebook as the country is clebrating two years of implementation of GST.

The GST was implemented through a gala ceremony held in the central hall of Parliament at the midnight of June 30, 2017 and came into effect from July 1, 2017.

“Except on luxury and sin goods, the 28 percent slab has almost been phased out. Zero and 5 percent slabs will always remain. As revenue increases further, it will give an opportunity to policy makers to possibly merge the 12 percent and 18 percent slab into one rate, thus, effectively making the GST a two rate tax,” he wrote.

Jaitley said that the challenges to implement the GST were “compounded by some outlandish and exaggerated comments of the not so well-informed. It would, therefore, be only fair to look back the last two years and analyse the implementation and the impact/ consequences of the GST”.

He added that the GST has changed the taxation system completely.

“The pre-GST rate of taxation as a standard rate for VAT was 14.5 percent, excise at 12.5 percent and added with the CST and the cascading effect of tax on tax, the tax payable by the consumer was 31 percent. The entertainment tax was being levied by the States from 35 percent to 110 percent. The assessee had to file multiple returns, entertain multiple inspectors and additionally face the inefficiency - trucks being stranded at the State boundaries for days altogether.... Today, there is only one tax, online returns, no entry tax, no truck queues and no inter-state barriers”, he said.  

He also wrote that most items of consumer use have been brought in the 18 percent, 12 percent and even 5 percent category.