CEA Subramanian hints at lesser slabs under GST

CEA Subramanian said although technical glitches have been noticed in filing for returns, the situation will stabilise over the coming months.

New Delhi: Chief Economic Adviser Arvind Subramanian has hinted reduction in the number of tax slabs under the Goods and Services Tax (GST), with the merger of 12 percent and 18 percent tax slabs into one.

CEA Subramanian, who addressed a gathering at the ICFAI Institute of Higher Learning in Hyderabad on Friday said although technical glitches have been noticed in filing for returns, the situation will stabilise over the coming months.

Earlier in the day, Finance Secretary Hasmukh Adhia also highlighted a similar notion and said that GST needs simplification, which can be brought out by reducing the number of slabs, only if prevailing conditions permit.

"If the five percent tax slab is removed, for example, then these items would be shifted to one of the higher slabs. This might have a detrimental impact on common man, as most items in this slab are essential commodities. If there is any scope to reduce the number of slabs, it should be done," Adhia told ANI.

A similar stance was also echoed by NITI Aayog Vice Chairman Rajiv Kumar, who also suggested that petroleum and electricity be brought under the ambit of the taxation scheme.

Earlier this month, the 23rd GST Council meeting brought as many as 178 items down from the 28 percent to the 18 percent tax bracket.

In a major boost to the service category, GST in restaurants underwent major changes with ITC (input tax credit) getting cancelled to all restaurants barring starred hotels.However, it was also noted that all stand-alone restaurants irrespective of air conditioned or otherwise, will attract five per cent without ITC. Food parcels (or takeaways) will also attract five percent GST without ITC.