Union Revenue Secretary Hasmukh Adhia has said that there is scope for rationalisation of tax rates fixed on various goods and services (GST) under the new tax regime to be implemented from July 1. He also said that the government's intention is not to increase the tax rates but to increase the revenue by implementing GST as it would bring transparency, simplification and efficiency in tax administration and help in curbing tax evasion and thereby leading to tax buoyancy.
On the concerns of the food processing sector, Adhia has said that decision on fixing rates of foodgrains, especially wheat and rice would be taken in the next GST Council meeting to be held on June 3. He also said that the Council would also take a view on the definition of brands and branding of food items. He pointed that the food processing industry needs to be encouraged and argued that if these items were kept in the exempted category, the food processing industry will be losing.
Revenue Secretary further said that there have been some concerns raised in the financial service sector that deposits or loans will become costlier on implementation of GST. He said “all people in financial services will know, we are not charging service taxes in deposits as well as loans, but taxes on other services. Loans are not going to become costlier”. He added that this is a misplaced fear, because of lack of understanding.
Noting that the new tax system would be a game changer, he said that it will help in creating lot of jobs for young generation. He also explained that the GST may push India's GDP up by more than 4% because of the simplicity and predictability of the new indirect tax regime, which will encourage people to be tax compliant. He added that the new indirect tax regime will create problems but one should find solutions, instead of not allowing it to happen.