GST slabs

It refers to the Authority of Advance Ruling (Karnataka bench) putting Roti and Parantha in different GST slabs of 5 and 12 per cent respectively. Irrationality also occurs in GST-slabs of other items like sweets, salted items, biscuits and bakery items which all attract different GST-slabs. It is illogical to have just lower 5-per cent GST slab on luxury item like sweets which is also considered health hazard increasing blood-sugar level. Another example is of spare-parts of cars while clutch-assembly attracts 28-per cent GST-slab, clutch-bearing attracts 18-per cent GST slab. Surprisingly even car-battery comes into luxury segment attracting 28-per cent GST.

GST structure should be totally modified so that at least similar items sold by a particular trader like confectioners and bakers may have a common GST slab of say 12-per cent. Likewise, there is no sense in keeping some car-spares in luxury-segment of 28-per cent. Instead cars can be kept in luxury-segment of 28-per cent while all car-spares can be put in lower slab of 12-per cent.

There have been talks of reducing number of GST slabs for long for simplification and to be in tune with other countries having adopted GST system. Ideally there should be just three slabs of 0, 12 and 28 per cent. With zero-GST applicable only on raw materials which cannot be directly used like unbranded food-grains, vegetables, cotton-yarn etc. Most other commodities may be under 12-per cent GST slab with 28-per cent slab reserved for luxury items and of items of long-term use like cars, refrigerators, air-conditioners, TV sets etc.

If such a system is adopted to end with GST slabs of 3, 5 and 18 per cent, then even corruption-generating Input-Tax-Credit system (ITC) can be retained only for trading purposes abolishing it from manufacturing and service sector. Such one-time consolidated GST reform will fetch much more revenue that too by reducing cost of goods and services inducing towards honest GST regime. Also cess-system for extra-luxury items should be replaced by special GST-slabs in multiples of 50 or 100 per cent with even petroleum products put under GST structure.

Subhash Chandra Agrawal,

Dariba, Chandni Chowk

DELHI 110006 (India)