A single rate under the Goods and Services Tax (GST) is not possible in a country with poor people, former Union Finance Minister Arun Jaitley wrote in a blog post on the second anniversary of the new indirect tax on Monday. “Those who argued for a single slab GST must realise that a single slab is possible only in extremely affluent countries where there are no poor people,” Mr. Jaitley, who was the Finance Minister for the bulk of the first two years of the GST, wrote. “It would be inequitable to apply a single rate in countries where there are a large number of people below the poverty line.”Direct taxes were progressive, he explained, as those who earned more paid more tax. Indirect taxes were regressive in this regard since the rate on the same products is the same for the rich and the poor. As revenue increases further, it will give an opportunity to policy makers to possibly merge the 12% and 18% slab into one rate, thus, effectively making the GST a two rate tax,” he said.

Source: The Hindu July 01, 2019 09:56 UTC