GSTs Tax bands : Good or Bad?
This debate between @BwoyBlunder and @DeepakShenoy on Twitter prompted me to jot down this short note on the efficacy of GST and whether multiple bands of tax rates violate the principles of a nationwide goods and services tax. The proposed GST regulations envisaged a four tier rate of taxation · Merit rate for essential goods and services · Standard rate for goods and services · Special rate for precious metals · NIL rate · But as it appears from the GST council meetings that ended on the 19th of October, we may have instead a five tier rate as follows: · Merit rate at 6% · FMCG products and non-essential food items etc. 12% · Standard rate for goods and services 18% · Luxury goods 26% · ...