Single-Rate GST Possible in Future India Not Ready Yet’

Nirmala Sitharaman said a single rate Goods and Services Tax (GST) remains a possibility in the future, although India is not ready for it just yet.

“When the review of GST was undertaken, one of the needs identified was that they (GST Council members) didn’t want four rates.

However, the question was whether they were ready to get into a one-rate situation. The answer was the country is not ready yet. Maybe sometime in future, “Sitharaman said.

She explained that the four-rate structure of 5, 12, 18 and 28% was not arbitrarily fixed in 2017, but arrived at after detailed exercise of aligning diverse state-level taxes with the nearest slabs.

The rates are now realigned to 5 and 12% in 2025.

She described the ongoing reform process as part of “new generation GST reforms”, focused on making the system simpler and fairer, especially for the poor and middle class.

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