Vijay Kelkar says single GST rate easy to administer

GST - Former finance secretary Vijay Kelkar on Friday advocated a single rate for the Goods and Services Tax (GST) as that would it simpler to administer.

The GST Council has already decided on the four-rate structure for the indirect tax regime, besides a cess.

Giving an example, he said it was better to first build a single-rate GST with a low rate, achieve full mastery of this, and then consider more complex possibilities such as high rates and multiple rates.

Delivering the C D Deshmukh lecture, organised by the National Council of Applied Economic Research, Kelkar said policymaking was required to address market failure, improve efficiency and equity in the society. With regard to taxation, he said it should be stable and simple, giving investors confidence to invest.

A task force constituted by the 13th Finance Commission, headed by Kelkar, had recommended that all goods and services should be taxed at the single GST rate of 12 per cent. It could be split as 5 per cent for the central GST and seven per cent for the state GST.

The GST Council, comprising finance minister, minister of state for revenue and state representatives, particularly their finance ministers, have already agreed on four GST rates — 5 per cent, 12 per cent, 18 per cent and 28 per cent — besides a cess above the peak rate on luxury and demerit goods such as tobacco. The item-wise rate will be finalised by committee of officers.

Kelkar said simplicity was the first mantra of policymaking. Right sequencing is another important pillar of policy making.(Read More)

Also Be Updated On: Budget 2017