Ahead of the goods and services tax (GST) Council meet on October 6, Union Finance Minister Arun Jaitley has hinted that there is scope for reducing the tax slabs under the new tax regime and also said that there is a need to ease compliance burden on small taxpayers. Noting that there is space and scope for improvement, he said, “Eventually once we become revenue neutral to think in terms of bigger reforms such as lesser slabs…But for that, we have to become revenue neutral plus.”
The minster has stated that currently, under the GST, items are slotted under rates of 5, 12, 18 and 28 percent, plus a levy on cesses on luxury items like cars, aerated drinks and tobacco products to compensate states for any revenue losses in the first five years. Stressing that indirect tax burden is borne by all sections of the society, he said it was always the endeavour of the government to bring down tax rates on mass consumption commodities. Adding further, he noted that direct tax is paid by more by the more affluent, somewhat by the others and certainly not by the weaker section but the impact of indirect tax places burden on all.
Therefore, Jaitley pointed out that efforts are always made in the fiscal policy to ensure that the commodities which are used largely by consumers are least taxed as indirect tax puts burden on everyone. Noting that India has conventionally been a tax non-compliant society, he said when people have the right to demand development, they also have the responsibility to pay what is required for the development.