It refers to media-reports about lowering GST on many more items so that 99% items will be under 18% or lower GST-slab as yet other unneeded financial gimmick. It is not proper to reduce GST-slab on items of long-term use like air-conditioners, refrigerators, etc, because it is one-time payment. Lower GST-slabs are beneficial on items of day-to-day use.
But government has never thought of lowering GST-slab on invisible service-sector where it needs urgent lowering from existing 18% slab to 12%. Such a high rate of GST-slab hurts badly those honest tax-payers where professional service-providers have to pay from their pocket heavy dose of 18% GST when those having availed service do not pay GST. For examples even government-departments and TV channels do not pay GST on delivering lectures or participating in TV debates. While on the other hand, those availing service in unorganised private sector pay professionals in cash to avoid GST thus resulting in heavy revenue loss through lower declaration of incomes in Income Tax returns.
Central and State governments should direct all their departments to add GST on payments to professionals who are registered under GST. Similar direction should be given to organised sector like TV channels to compulsorily add GST on payments made to participants in TV debates if participants are registered under GST.
Best is to have two GST-slabs of 10 and 30% abolishing all other slabs including lower ones of 0, 3 or 5 with most items and service covered under 10% slab while items of long-term use and luxurious goods may be under 30% slab. For extra-luxury items presently attracting cess, additional slabs in multiples of 50 or 100 can be introduced. Tax-evasion can then be tackled by retaining Input-Tax-Credit ITC system only on trading, abolishing from manufacturing and service sector. Presently ITC has become tool for big tax-evasion where manufacturers are purchasing unused GST-invoices at premium to avail false ITC. System will be of ultimate advantage to everyone concerned including commoners even if they have to pay 10% GST on items presently under lower slabs of 0, 3 or 5%.
