“Too
many rates in goods and services tax are leading to classification disputes and
that needs to be resolved,” Mr.
Sanjay Agarwal, Chairman of the Central Board of Indirect Taxes and Customs
said in an interview Wednesday.
Mr. Agarwal said GST compliance has improved since the
tax was introduced in July 2017 and revenue growth has stabilized. That gives
the government room to review the rates to simplify the system, he said.
Revenue
from GST has been steadily rising over the years and increased 11.7% in the
fiscal year through March 2024. The collections rose to 1.74 trillion rupees in
June.
Mr. Agarwal said the government intends to simplify
the GST structure by taking the existing slabs of 5%, 12%, 18% and 28% and
combining it into three rates. The new rates would not impact the revenue
collection adversely and the entire exercise “will be done in next few months.”
On Tuesday, the government also announced a reduction
in the import duty on gold to boost jobs and exports in gems and finished
jewelery products.
“High duty
was leading to smuggling,” Mr.
Agarwal said, adding that in 2023-24, the department had seized 4.8 tons of
gold worth close to 2.9 billion rupees. The tax was imposed when the current
account deficit was high, but since it’s manageable now, the government has
reduced it to boost the sector, he said.
In reference to the 28% GST levied on online gaming
last year, Agarwal said the government has collected over 130 billion rupees
from the companies since Oct. 2023.