New Delhi: In a significantly ‘tax non-compliant country’, a single Goods and Services Tax (GST) rate won’t work, said the Union Finance Minister Arun Jaitley.
He also added that in a country like India where a significant population is deprived and below poverty line, a single GST rate will not work in the near future.
However, he said, the government was moving towards rationalisation of the Goods and Services Tax (GST) structure, which would pick up more pace once tax compliance improves.
“India has been a significantly tax non-compliant country. And therefore, the compliance standards in India have to be first improved. Also, in a society like India where you still have a significant population which is deprived or below the poverty line, a single (GST) rate can’t work,” Jaitley said at “India-Korea Business Summit” in New Delhi.
He added that it was the reason that the government started with multiple rates and was now moving towards rationalisation.
“In the first stage of rationalisation process, we are thinning out the 28 per cent bracket. After we have thinned the 28 per cent and are able to improve compliance levels, then the second stage of reform of further consolidating other rates would begin – with two rates merging into one,” the Finance Minister said.