Delhi Chief Minister Arvind Kejriwal has rightly suggested single-slab GST-structure (12-per cent) like exists in almost all the countries having rational Goods and Service Tax (GST). But poor planning before implementation of GST on 01.07.2017 will make political opponents provoking public-sentiments on abolishing 5-percent minimum slab. This slab must not have been retained in the very beginning to avoid public-resistance in abolishing it in later days. Instead of frequent revisions, GST-structure should be overhauled for once on basis of inputs and experience till now not caring about a possible public-resistance in abolishing lower 5-per cent slab and some higher tax-slabs in larger public good. A blend of suggestions of Arvind Kejriwal and Sushil Modi (Bihar Deputy Chief Minister) coupled with abolition of corruption-generating and revenue-losing Input-Tax-Credit (ITC) can give nation an ideal GST-system. Broadly two GST-rates of 10 and 20 per cent imposable on net sale-price should be there rather than being imposed extra to provide effective 11 and 25 percent GST on basic commodity price. In case of extra-luxurious commodities presently attracting cess, even higher slabs in multiples of 10 imposable on net sale-price should be there abolishing concept of irrational cess altogether.
GST on service-sector at 10-per cent of net payment all having income of rupees five lakh and above under scope of GST, with abolition of ITC will give much more revenue without affecting the consumers. Those availing service should deduct GST from payable amount and deposit with the exchequer like is done for Tax-Deducted-At-Source in case of Income-Tax. Service provider then can deposit GST only where GST is not deducted at source. Present excess GST of 18-pe cent on service-sector makes service-providers demanding fees in cash to avoid GST. Filing of GST-returns should be made user-friendly through quarterly filing of GST-returns but with deposit of GST in exchequer on monthly basis.
Subhash Chandra Agrawal
(The views expressed by the author in the article are his/her own.)