In order to further simplify the India’s tax regime, Principal Economic advisor to the Finance Ministry Sanjeev Sanyal has said that the Goods and Services Tax (GST) slabs may be brought down to three in the long-term, along with the exemption category. He added that the three slabs could be a low of 5 percent, the middle bracket of 15 percent (merging 12 percent and 18 percent slabs that exist now) and a top rate of 25 percent. Presently, there are four GST slabs of 5, 12, 18 and 28 percent, plus the exempted category which attracts zero percent GST.
Sanyal also said that the central rate of 15 percent will be applied for the bulk of goods. He said they are looking to have a simple tax rate with round figures and most of the goods with the same rate. He further said that as the tax system gets simplified, more and more people will be paying their taxes.
Principal Economic advisor added that the tax collection has significantly gone up since the introduction of GST and now a lot of people are paying direct taxes. He noted that so if the direct tax revenues continue to do well, the centre may further simplify the direct tax system, lower the rates and would ultimately move towards the corporate tax rate of 25 percent.
