12% & 18% GST slabs may be merged, 28% for demerit goods: Arvind Subramanian

12% & 18% GST slabs may be merged, 28% for demerit goods: Arvind Subramanian

India News

The government may combine the 12 per cent and 18 per cent slabs for goods and services tax (GST) into one in the near future and reserve the 28 per cent rate only for demerit goods, said chief economic adviser Arvind Subramanian. While India will never move to a single GST rate, over time there would be a “poor man’s” rate (0 per cent and 5 per cent), a “core” rate (the 12 per cent-18 per cent combination), and the demerit rate (28 per cent), Subramanian said. Cement and white goods are not demerited goods, but the government was deliberately “going slow” on those items due to revenue considerations. The chief economic adviser, who had last year proposed a revenue-neutral rate of 15.5 per cent, said GST collections were not doing badly and the government would take a call on the overall fiscal situation in a few weeks. “I think we are certainly heading in the right direction (on the GST structure),” Subramanian said.