GST launch today: NITI's Bibek Debroy flags multiple rates as key problem

According to Debroy, multiple rates emanate from the desire to tax items that are seen as luxuries

NITI Aayog member and wellknown economist Bibek Debroy on Friday said that one of the key problems with the present GST (Goods and Services Tax) regime is its multiple rates structure.

According to Debroy, the multiple rates of GST emanate from the "desire to tax items" which are perceived to be luxury through the means of indirect tax and not the direct ones.

"Please understand these multiple rates are coming from... this desire to drive other ends through indirect tax policy and other concerns of the states," Debroy said at Aaj Tak GST Conclave.

"And therefore, you have plenty of exemptions, plenty of items that are outside the GST net and multiple rates."

The present GST tax rates are divided into four slabs of -- 5 per cent, 12 per cent, 18 per cent and 28 per cent -- as decided by the GST Council.

The GST regime touted as the single most significant tax reform since Independence will be implemented from July 1, Saturday.

Besides rates, Debroy said that the present GST set-up might not be perfect but it is a step in that direction.