“Too many rates in goods and services tax are leading to classification disputes and that needs to be resolved,” Sanjay Agarwal, chairman of the Central Board of Indirect Taxes and Customs, stated in an interview on Wednesday. India plans to simplify the GST rate regime in the coming months.
India is dealing with working on the country’s deals charge system by presenting three sections rather than the current four rates, a top expense official said.
Since the tax was implemented in July 2017, there have been too many rates, and revenue growth has stabilized. He stated that this permits the government to review the rates in order to simplify the system.
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In the fiscal year ending March 2024, revenue from GST increased by 11.7%, continuing a trend of steady growth over the years. In June, the collections increased to 1.74 trillion rupees.
Agarwal stated that the government intends to combine the existing slabs of 5%, 12%, 18%, and 28% into three rates in order to simplify the GST structure. The entire process “will be completed in the next few months,” and the new rates would not have any negative effects on revenue collection.
To boost employment and exports of gems and finished jewelery products, the government also made an announcement on Tuesday regarding a reduction in the gold import duty.
Agarwal stated that “high duty was leading to smuggling” and that the department had seized 4.8 tons of gold worth close to 2.9 billion rupees between 2023 and 2024. He stated that the government has reduced the tax to boost the sector because the current account deficit is now manageable. The tax was imposed when the deficit was high.
Regarding the 28% GST demanded on internet gaming last year, Agarwal said the public authority has gathered more than 130 billion rupees from the organizations since Oct. 2023.
