NEW DELHI: Former finance secretary Vijay Kelkar has backed a single rate for the Goods & Services Tax (GST) saying it would help the authorities administer it better before considering multiple rates.
The GST council, which has representatives of states and the Centre, has finalised a four-tier GST rate structure of 5%, 12%, 18% and 28%, with lower rates for essential items and the highest for luxury and de-merits goods that would also attract an additional cess.
“Our first objective should be to establish easy objectives for state capacity, and fully succeed in building this state capacity. Only after this is done should we try for a more complex problem. As an example, it is better to first build a single-rate GST with a low GST rate, achieve full mastery of this, and only then consider more complex possibilities such as high rates, multiple rates etc,” said Kelkar, who is the president of the Indian Statistical Institute and chairman of the National Institute of Public Finance & Policy.
Kelkar, who has straddled the public policy space for nearly 40 years, also called for privatisation of state-run firms such as Air India and Steel Authority of India (SAIL).