GST slab rejig proposal: In favour of hiking rate on gold and silver, says Najib Shah

The Goods and Services Tax (GST) Fitment Committee has proposed raising the slab of 5 percent to 7 percent and 18 percent to 20 percent, sources informed CNBC-TV18. They are also considering hiking the compensation rate from 1 percent to 1.5 percent.

The proposed GST on precious metal (gold/silver) will be hiked from 3 percent to 5 percent, sources said. The feasibility of merging 12 percent and 18 percent to a single slab at 17 percent is, however, yet to be examined.

However, the Group of Ministers (GoM) have yet to deliberate on these changes in rate slabs. The Council is likely to take this forward once the GoM takes a final view, which is likely on November 27.

Discussing this, Najib Shah, former chairman, CBEC, said, “I am all for a merger of the 12 and the 18 slabs, and bring it to anything between 16 to 17 (percent) and that would take care of a lot of the revenue considerations. Once that happens, the revenue-neutral rate, ideal of 15 to 17 or 16 percent will also be achieved largely.”

: Exclusive: Fitment committee proposes raising GST slab of 5% to 7% and 18% to 20%

He further said he was for hiking the rate on gold and silver from 3 percent to 5 percent because 3 percent is a rate neither here nor there, it is another special rate.

"If the Fitment Committee has recommended hiking the rate from 5 percent to 7 percent, they may have their reasons but I don't know whether the GoM will go with those simply because it doesn't really look very politically expedient for them to go on increasing this rate from 5 to 7 percent," Shah told CNBC-TV18.

Also Read: India should look at a GST rate structure with 2 or 3 slabs: Deloitte's MS Mani