“A future road map could well be to work towards a single standard rate instead of two standard rates of 12 per cent and 18 per cent. It could be a rate at some mid-point between the two.” He also said the country should look towards having slabs of zero, five per cent and a standard rate for luxury and sin goods (alcohol, drugs, cigarettes, etc.).
Stating that only cement and auto parts are items of common use which remain in 28 per cent slab, Jaitley said the next priority will be to transfer cement into a lower slab.
All other building materials have already been transferred from 28 per cent to 18 per cent and 12 per cent. The sun is setting on the 28 per cent slab, he added.
Jaitley said of the 1,216 commodities which are used, broadly 183 are taxed at zero rate, 308 at 5 per cent, 178 at 12 per cent and 517 at 18 per cent.
The 28 per cent slab is now a dying slab, he said. Currently, 28 items, including luxury and sin goods, auto parts, dishwashers, AC and cement remain in the highest slab of 28 per cent.
With the GST transformation completed, we are close to completing the first set of rates of rationalisation i.e. phasing out the 28 per cent slab except in luxury and sin goods, he said.
The GST Council in its last meeting on Saturday cut rates on 23 items, thereby trimming the 28 per cent slab.
The assessees had only two options either to pay a high rate of tax or evade it, he said, adding tax evasion was prevalent to a large extent. India comprised of multiple markets.