As India is set to complete one year of GST that aimed to rationalize the indirect tax system in the country, the government will now review high tax items and the procedure may well begin with the construction material such as cement and paints that are placed in the highest GST slab rate of 28%.
At the same time as per the 80:20 rule, wherein the government seems to general 80% of the revenue from some handful items, it is also considering to pare down tax structure on some of the items.
The relief as lowered GST on cement and paint if brought about will augur well for the construction sector as even the employment scenario has also been hurted and this is the case just ahead of the general assembly elections slated for early next year.
When the GST came into force on July 1, 2017, efforts were made to levy rates at par with prevailing levies such as that of VAT and excise and thereby took a revenue neutral stance.
So, in course of time, though the initial cuts made to the different items was nominal, efforts will be made to put less number of items in the highest slab of 28% while the 12% and 18% will be worked in such a way so as to merge them. And as per Hasmukh Adhia, finance secretary, this will be effected once the revenue rationalization is achieved.