Citing Singapore model, experts bat for cutting multiple GST rates in India

Economy


Singapore: Citing the example of Singapore, several experts have suggested that India should do away with multiple tax slabs under the Goods and Services Tax (GST) for greater ease of compliance.

Singapore has only one tax rate under GST— seven per cent — on taxable goods and services while India has multiple slabs to charge the indirect tax.

An achievement of India’s GST implementation is that the measure hasn’t been inflationary, according to Abhijit Nath, who works with Insitor Partners, a consultancy firm on GST.

Loading...

“However, to avoid confusion and greater ease of compliance, India should aim for a two-rate system over time to be in line with global best practices,” suggested Nath.

GST introduction in India has the potential to be a long-term game-changer by unifying the country as one market, he said.

Singapore’s practice of early announcement of GST rates for various categories helps in smooth transition, he added.

“This also makes the increase politically viable,” Nath said, suggesting that the same can be followed in India as well.

Singapore’s Finance Minister Heng Swee Keat in his budget 2018 speech announced that there are plans to increase GST from 7 per cent to 9 per cent sometime from 2021 to 2025, according to the Inland Revenue Authority of Singapore (IRAS).

Sandeep Chilana, managing partner of Chilana and Chilana law offices, said India should endeavour to move towards least tax slabs.

He said while other countries have considered a single rate of GST, keeping in mind the vast gap in per capital income and the need for generating revenues, it may not be possible at this stage for India to consider it.

“However, India should endeavour to move towards least tax slabs possible, of 6 per cent and 14 per cent,” Chilana said.

Manu Bhaskaran, founding director and chief executive officer of Centennial Asia Advisors, said GST is one of the most efficient taxes available “so it is a good tax”.

“By itself, it can be regressive so it needs to be combined, as Singapore did, with other measures so that the net effect is not regressive,” he said, when asked what developing economies like India can learn from Singapore’s GST model.



Source link

Articles You May Like

‘Pandemic fatigue’ leads to resurgence of coronavirus in Europe
Dow futures jump 200 points continuing rebound from September sell-off; Nike shares rise
A brewing U.S.-China tech cold war rattles the semiconductor industry
How the pandemic has impacted luxury retail
Movie theater stocks tank after another disappointing box office tally

Leave a Reply

Your email address will not be published. Required fields are marked *

Loading...