(Illustration: C R Sasikumar)As the Goods and Services Tax (GST) overcomes the transitional implementation challenges, it is time to look ahead to further improving it. High priority must now also be accorded to the inclusion of electricity in GST. Recall that including electricity in GST would reduce or eliminate embedded taxes in electricity-using products. This would be to impose a 5 per cent tax on electricity in the GST — allowing inputs tax credits to flow through the GST pipeline — but then allow state governments to impose a small non-GST cess on top of the GST rate. The likelihood of fiscal losses suggests that implementation should perhaps wait till GST revenues have stabilised, say, by the end of this fiscal year.

Source: Indian Express December 06, 2017 19:23 UTC