Chief Economic Advisor Arvind Subramanian on Friday said going forward there will be fewer GST rate slabs and petroleum products are to be brought under the Goods and Services Tax with cooperation of the States.
“It will happen in the next few months and years … and done cooperatively,” he replied to a query on when petrol and diesel would come in the ambit of GST and whether States would agree to such a move.
(Petroleum Ministry had already written a letter to the GST Council asking for petrol and diesel to be brought under GST, something that may not go down well with the State governments as the VAT they levy on the fuel is a major revenue earner. Besides VAT, the other significant levy on petrol and diesel is the excise duty component. Bring the fuel under GST is expected to reduce the pump price. )
Mr.Subramanian, who earlier in his lecture on ‘Economic Policy Making in the Government’ at the ICFAI Foundation for Higher Education here, said it is difficult to have one GST rate in a country like India, given that it would translate into taxing essential commodities and luxury items on the same level.
But the country is moving towards fewer rates, he said. “What we have done [is] collapsing the 28% rate so that it will only have items of luxury consumption. Then overtime, the 12 and 18% rate [slabs] can probably be collapsed into one rate. We will see fewer rates,” he said.
On when this is likely to happen, he said: “As we evolve and get comfortable with revenues, I think we will be looking at further simplifications… over the next few months.” To another query on the proposal to change financial year from April-March to January-December, he said no decision has been taken as yet.
With regard to the growing popularity of crypto currency, Mr.Subramanian said officially Bitcoins are banned and the government only has the prerogative to issue a currency. People, he added, would also trust the sovereign currency only.