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GST - PM's Economic Advisory Committee favors single slab for Goods & Services

In my earlier posting, I have mentioned the salient points of the recommedations by the Empowered Committee of the State Finance Ministers (EC). 

Last week the Prime Minister's Economic Advisory Committee (PMEAC) headed by C.Rangarajan favoured a single slab each for goods and services or one common rate for both under the proposed goods and services tax (GST), unlike the proposal mooted by the states.

Rangarajan said,"The Centre could follow the pattern in which there is only one rate for goods and one rate for services, or one rate which is common to both goods and services". He added that there is an advantage in having single uniform rate. He added that having a separate slab for precious metals is neither advisable nor advantageous.

As I mentioned in my post that the empowered committee suggested two main rates for goods, besides a special rate for precious metals. However, for services the committee proposed just one rate. It also suggested that some goods be exempted from the proposed GST.

Last week, chairman of empowered committee of state finance ministers Asim Dasgupta had said GST would have four slabs. Among the GST tax slabs, it would be zero for exempted items, one standard rate for majority of goods and services and another having a moderate rate, he said.

The EC expected the Centre will follow same structure for GST as mooted by it. However, a task force set up by the 13th Finance Commission has suggested a single GST for the Centre and the states, though rates proposed are different.
 
Wait for more updates. I will post a separate note on the hurdles on implementaion.
 
Cheers,
Gopal

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