Sorting still needs a lot of work Goods exempted from GSTEspecially in the services sector, Revenue Secretary Tarun Bajaj said on Tuesday.
Addressing an interactive session of CII, Mr Bajaj said that efforts are on to remove the ‘rough edges’ goods and services Tax (GST) in the next two-three years.
On rationalization of GST rates, the Secretary said that a Group of Ministers is considering it. “We will have to wait for some time,” he said. The discount still remains, with a large number on the services side, Mr Bajaj said, adding that ‘work needs to be done to cut it.’
Stating that 5% GST on non-ICU hospital rooms above Rs 5,000 is against affordable healthcare, Mr Bajaj said the percentage of rooms in hospitals charging more than Rs 5,000 is “modest”.
“If I can spend ₹5,000 on a room, I can pay ₹250 for GST. I see no reason for such a message that 5% GST is affecting affordable healthcare,” Mr Bajaj said.
The secretary said that the 28% slab in GST contributes 16% to the gross GST revenue, while a major chunk of 65% comes from the 18% slab.
The slabs of 5% and 12% contribute 10% and 8% to the total gross GST revenue.
Under GST, a four-rate structure that allows a reduced rate of 5% on essential goods or a top rate of 28% on cars. The other slabs of tax rates are 12% and 18%.
In addition, there is a special rate of 3% for gold, jewelery and precious stones and 1.5% on cut and polished diamonds.
In addition, a cess is levied on the highest tax slab of 28% on luxuries, sin and demerit items. The collection from the cess goes to a separate fund – the Compensation Fund – which is used for revenue loss to the state due to the rollout of GST.