Central Board of Indirect Taxes and Customs has further complicated system of Goods and Service Tax (GST) to check cases of false Input Tax Credits (ITC) with businessmen with monthly turnover of rupees 50 lakhs and above mandatorily required to pay at least one-percent GST liability in cash. Numerous amendments in GST structure in its short regime of introduction in India has proved that GST structure as a whole requires complete overhaul to make it simple-most in a manner than all those registered under GST may voluntarily and honestly comply with the system. Honest compliance of GST will result in reduction of Income Tax evasion also.
Input Tax Credit (ITC) is main source of corrupt practices under GST system. Best is to abolish 18-percent GST slab, and to retain ITC only on tradable commodities abolishing it totally from manufacturing and service sectors. It will not increase production-cost because most commodities presently coming under 18-percent GST slab will then be covered by 12-percent GST slab. Still better will be to have a unified 10-percent GST slab replacing GST slabs of 3, 5, 12 and 18 percent retaining 0-percent slab only for raw commodities which cannot be normally directly consumed. Common people will be more than benefitted because then service-sector will have 10-percent GST slab, the common-most single slab in countries having GST system.
Items of long-term use and luxury may have GST slab of 30-percent replacing existing 28-percent GST slab. Cess on extra luxurious items over present 28-percent GST slab may be replaced by GST slabs in multiples of 50 or 100 percent also bringing petroleum products under GST system.
SUBHASH CHANDRA AGRAWAL