India not yet ready for single-rate GST: FM

KOLKATA: Union Finance Minister Nirmala Sitharaman on Thursday said that while the government has moved to rationalise Goods and Services Tax (GST) slabs, the country is “not yet” prepared for a single-rate GST system, though it remains a possibility in the future.

At an event in Kolkata, she underlined that the four-rate GST structure of 5, 12, 18 and 28 per cent was not arbitrarily fixed, but arrived at through a detailed exercise of aligning diverse state-level taxes with the nearest slabs.

“When a review of GST was undertaken, one of the needs identified was that they (GST Council members) didn’t want four rates. However, the question of whether they were ready to get into one rate situation as yet was answered with not yet. Maybe sometime in future,” Sitharaman said.

The FM 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.

Recalling an initiative about eight months ago, she said Prime Minister Narendra Modi had asked her to “do something about GST” to strengthen what she termed one of India’s biggest achievements — the creation of a single national market by subsuming multiple central and state taxes and removing barriers like tolls and border posts.