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Three months since the roll out of the Goods and Services Tax on July 1, Finance Minister Arun Jaitley on Sunday promised more simplification of the levy with lower number of tax slabs with more revenue buoyancy.
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.”
At the valedictory address at the National Academy of Customs, Indirect Taxes and Narcotics (NACIN), he also said that there is space and need for improvement in GST in terms of reducing the compliance burden for small taxpayers.
His comments are significant given that critics have noted the multiple rates under GST instead of the original objective of a single tax rate on both goods and services.
But with numerous exemptions and a four-tier rate structure -- five per cent, 12 per cent, 18 per cent and 28 per cent, apart from a compensation cess and different rates for gold (three per cent) and rough diamonds ( 0.25 per cent), the current model of GST is much different.
But while highlighting the transformation in the indirect tax structure that will also impact the economy, Jaitley underlined the need for revenue by the government as well.
“Revenue has a great importance in society…it is the lifeline of governments. It is the lifeline of all developmental activities,” he said, adding that people have a huge responsibility to pay taxes.
Noting that there is more realisation of the importance of greater compliance through direct tax reforms as well as the GST, Jaitley also urged tax officials to ensure that the money is used honestly with less leakage and to not harass taxpayers.
“You don’t have to extort taxes out of those who are not liable to pay, but you are certainly liable to collect taxes from those who have to pay. Standards of fairness and compliance must be the highest,” he stressed.
He further said that there are no grey areas in tax laws implementation. If a tax is payable, then it's payable and if not, then it is not payable.
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