| "We have to keep in mind the ground reality and see them (rates) in the context of leakages," Parthasarthi Shome, Advisor to the finance minister, said at a PHDCCI conference, a day after a VAT panel favoured a dual structure for GST "" one at the state level and another at the Central level. |
| Shome said Japan and Singapore had rolled out GST of 3-4 per cent because leakages and exemptions in those economies were less. Besides, many advanced nations have GST rate of anywhere between 17-22 per cent, he said. |
| Shome said any lower rate for GST than the prevailing indirect taxes should be appreciated since the new tax system would make lives of taxpayers much easier as there would not be multiplicity of taxes, as was the case now. |
| R Sekar, joint secretary in the Tax Research Unit of the finance ministry, said the key to success of GST is moderate tax rate, but for that the tax base will have to be broadened. |
| Though there was theoretical consensus on reducing exemptions, industry still wanted them, he said. |
| "I don't think there is empirical evidence to prove that exemptions spur competitiveness," Sekar said, referring to various demands in the seminar for such exemptions. |
| He said there was a great degree of confidence and consensus that GST would be introduced as per schedule on April 1, 2010. |
| Meanwhile, yesterday the VAT panel said it would recommend the dual GST structure to the Centre, but the rates were yet to be decided. |
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