HIGHLY IRRATIONAL GST-SYSTEM
Bureau,Odishabarta
DELHI:GST-system is highly irrational when spare-parts of cars have varying GST-rate. While clutch-assembly attracts 28-percent GST-slab, clutch-bearing attracts 18-percent GST slab. Surprisingly even car-battery comes into luxury segment attracting 28-percent GST. There is irrationality in GST-slabs of other items like sweets, salted items, biscuits and bakery items which all attract different GST-slabs. It is illogical to have just 5-percent lower GST slab on luxury item like sweets which is otherwise also considered health hazard increasing blood-sugar level.
GST structure should be totally modified so that at least similar items sold by a particular trader like confectioners and bakers may have a common GST slab of say 12-perecnt. Likewise there is no sense in keeping some car-spares in luxury-segment of 28-percent. Instead cars can be kept in luxury-segment of 28-percent while all car-spares can be put in lower slab of 12-percent.
There have been talks of reducing number of GST slabs for long for simplification and to be in tune with other countries having adopted GST system. Ideally there should be just three slabs of 0, 12 and 28 percent With zero-GST applicable only on raw materials which cannot be directly used like unbranded food-grains, vegetables, cotton-yarn etc, most commodities may be under 12-percent GST slab with 28-percent slab reserved for luxury items and of items of long-term use like cars, refrigerators, air-conditioners, TV sets etc.
If such a system is adopted to end with GST slabs of 3, 5 and 12 percent, then even corruption-generating Input-Tax-Credit system (ITC) can be retained only for trading purposes abolishing it from manufacturing and service sector. Such one-time consolidated GST reform will fetch much more revenue that too by reducing cost of goods and services inducing towards honest GST regime. Also cess-system for extra-luxury items should be replaced by special GST-slabs in multiples of 50 or 100 percent.
Input;Subash Agarwal
