PHDCCI calls for 3-tier GST with highest slab at 18%
The current GST regime follows a four-tier structure that exempts or imposes a low rate of tax 5% on essential items
New Delhi: PHD Chamber of Commerce and Industry (PHDCCI) on Wednesday proposed a 3-tier GST rate structure, with the highest slab at 18%. The industry body suggested the lowest rate at 5%, a moderate rate of 12% by clubbing the existing category of 12% and 18%, and the highest rate of 18% on luxury and sin goods.
The current GST regime follows a four-tier structure that exempts or imposes a low rate of tax 5% on essential items. The other slabs of tax are 12% and 18% and top rate of 28% is levied. Other than this, a 3% rate is applied on gold, silver and processed diamonds.
Industry body believes that the rationalisation of rates will help boost consumption, revenue collection, tax compliance and reduce tax evasion. Simplified tax regime is the need of hour to reduce litigation pertaining to tax matters, it added
A countrywide GST, which subsumed 17 local levies like excise duty, service tax and VAT and 13 cesses, was rolled out in July 2017.
India’s GST collections surpassed Rs 1 lakh crore in July after the second wave of Covid-induced restrictions caused a blip in the previous month.
The GST mop-up jumped 33% year-on-year in July to over Rs 1.16 lakh crore, indicating that the economy is recovering at a fast pace. In July 2020, the collection stood at Rs 87,422 crore.
This is the second highest collection so far this fiscal after a record Rs 1.41 lakh crore mop-up in April. The finance ministry in a statement said robust GST revenues are likely to continue in the coming months as well.
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