GST rate cut will not have major impact on govt revenue, fiscal deficit, says Arvind Subramanian

Mumbai: In an exclusive interview to CNBC TV-18 on Wednesday, chief economic adviser (CEA), Arvind Subramanian backed last weeks' rate cuts by the GST Council that has hinted at a further rationalisation of the new five-tier indirect taxation system. Subramanian, who sounded optimistic on recent developments on GST front, said the rate cuts by the Council will not have any major impact on government's revenue. There will also be no major effect on India's fiscal deficit, he said.

Chief economic adviser Arvind Subramanian.

Chief economic adviser Arvind Subramanian.

The GST Council last week moved 178 items out of total 227 goods and services in the top 28 percent slab to the standard 18 percent bracket. The Council also said from 15 November, there will be only a 5 percent tax rate on eating at restaurants other than the five-star hotels.

While announcing the reduced tax rates, finance minister Arun Jaitley had said hotels or restaurants will no more get input tax credit as, according to him, they were not passing on the benefits of the provision to the customers.

Subramanian in his interview further said the government was looking for an administrative simplicity in the GST regime and for that it was considering fewer tax rates. On a query on cement which still was left in the top slab of 28 percent, Subramanian said cement was a big contributor to the tax revenue. "The GST Council will take a call on the issue in a few months," he said.

According to the chief economic adviser, the compliance burden for filing returns under GSTR II and GSTR III categories has reduced significantly. The Council will also decide on the issue of land and real estate which are likely to be included in GST system. On exports front, the CEA said non-oil exports growth is much better than the figures of past 8-9 months.

Updated Date: Nov 15, 2017 12:56 PM

Also Watch

IPL 2018: Royal Challengers Bangalore eye revival against Chennai Super Kings as 'Cauvery Derby' comes back to life
  • Thursday, April 26, 2018 In the Kanjarbhat community, a campaign against 'virginity tests' is slowly gaining ground
  • Tuesday, April 24, 2018 It's A Wrap: Beyond the Clouds stars Ishaan Khatter, Malavika Mohanan in conversation with Parul Sharma
  • Monday, April 9, 2018 48 hours with Huawei P20 Pro: Triple camera offering is set to redefine smartphone imaging
  • Monday, April 16, 2018 Rajyavardhan Singh Rathore interview: Sports can't be anyone's fiefdom, we need an ecosystem to nurture raw talent

Also See