GST rates rationalisation needed: Finance Secretary

‘Not concerned about rupee value, RBI managing volatility’

Agencies New Delhi

Finance Secretary Tuhin Kanta Pandey on Monday said enough experience has been gained with regard to implementation of GST and now the rates need to be rationalised in consultation with states. 

The GST Council, chaired by Finance Minister Nirmala Sitharaman and comprising her state counterparts, has set up a group of ministers (GoM) to suggest changes in GST rates as well as reduce slabs. The report on rate and slab rejig is long pending. It was expected that the GoM would submit its report in the last Council meeting in December, but it did not. 

Replying to a query from industry representative at a FICCI post-budget meeting, Pandey said GST brought in transparency in taxation post its implementation in 2017. "Now that we have certain experience in GST implementation, it will be very important to see how things will be going forward. The exercise needed much more consultation with states in the Council," said Pandey, who is also the Revenue Secretary.

“Rationalisation is needed. There is recognition that it is needed. But how exactly it will be able to translate and what are the numbers, we will be able to arrive at, which are the rates we will be able to arrive at, that further exercise will be done by GoM,” Pandey added. Currently, GST is a four-tier tax structure with slabs at 5, 12, 18 and 28 per cent. Luxury and demerit goods are taxed at the highest bracket of 28 per cent, while packed food and essential items are in the lowest 5 per cent slab. 

Amid rupee falling to a record low level of 87.29 to a dollar, Pandey said there is no concern over rupee value and the RBI s managing the volatility of the local currency. “There is no concern about the value of the rupee. The volatility in rupee is being managed by the RBI. He said the Indian rupee is "free-float" and no control or fixed rate is applicable on the currency.

He said the exchange rate is facing pressure amid unabated foreign fund outflows. The rupee depreciated 67 paise to hit record low of 87.29 against the US dollar in early trade on Monday after Trump Tariffs on Canada Mexico and China triggered fears of a broad trade war.