GST rates of 12% and 18% will be merged in future, says Jaitley

GST rates of 12% and 18% will be merged in future, says Jaitley

Finance Minister Arun Jaitley on Thursday said the GST rates of 12% and 18% will be merged into one once the government's taxation revenues go up in the coming future.

He said merging of the two GST rates would mean sending some of the 12% items in 5% and some 18% one's in a different rate structure. This will result in two rates 5% and another 'X' per cent.

Jaitley said this while speaking at a media event here.

He, however, said that a single rate GST structure was not possible for a country like India but reassured that a lot more articles from the highest tax rate structure of 28% would be moved to lower rates.

"The highest rate of 28% will eventually apply only to luxury and sin goods gradually. Eventually that will be our direction but how fast we are able to do it will depend on how the revenues pick up," he said.

"You earlier had 17 taxes, now it's only one tax. We had an atrocious tax system pre-July 1. These brackets would not have been possible if everyone were not on the same page. Let me make it clear, though, a single rate GST is not possible in India. We cannot have a tax system which has the same rate for a Hawai chappal and Mercedes car," Jaitley said.

In reply to a question, Jaitley said infrastructure creation and rural development would be the two focus areas of the Union Budget to be presented in February.

"A lot of concentration needs to be given to infrastructure and rural development and I think whatever additional resources we get, will go into that," Jaitley said.

The finance minister said that the government will also start a comprehensive employment survey soon to address the problem of unemployment in a better way.
He said since a bulk of job creation in India is done through the informal sector unlike in the developed countries and that is probably one of the reasons why the country historically did not have regular employment surveys.

"Sure, we will start job survey exercise soon, because we can't continue groping in the dark when it comes to this. Unemployment creates social unrest," he said.
To another question on expectations of a double digit growth rate in India, Jaitley said 10% growth was a very challenging figure and achieving that would depend not just on domestic factors but also global factors.

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