National Institute of Public Finance and Policy study says Government can rationalise the rates without losing revenues. Multiple rate changes since the introduction of the GST regime in July 2017 have brought the effective GST rate to 11.6% from the original revenue neutral rate of 15.5%, Finance Minister Nirmala Sitharaman pointed out at the last Council meeting in September. “Merging the 12% and 18% GST rates into any tax rate lower than 18% may result in revenue loss. Our study proposes that the GST Council may consider a three-rate structure by adopting 8%, 15% and 30% for revenue neutrality,” NIPFP associate professor Sacchidananda Mukherjee told The Hindu. Also Read Lack of GST details stumps economists‘Useful methodology’“The results are indicative given the limitations of data, but the methodology developed in this paper could be useful for any future analysis of restructuring of the GST rate structure,” Mr. Mukherjee said.

Source: The Hindu November 26, 2021 01:06 UTC