Finance Minister said that he expected convergence of two Goods and Services Tax (GST) rates into one in the coming days, though ruling out a single rate of taxation under the new indirect tax regime.The GST Council may decide on convergence of rates at appropriate time organized by The Economist magazine.

He, however, ruled out a single standard GST rate as it would be inflationary for a disparate range of consumers and added that one tax rate was inequitable. He noted that GST implementation was quite smooth without any major glitches. All goods and services under the pan-India GST regime, which has subsumed multiple central and state levies, have been categorized in four tax slabs of 5, 12, 18 and 28 per cent, besides those items that attract zero tax.

The Finance Minister had earlier said that he can converge some taxation in the future. 12 per cent and 18 per cent can be converged into one. But if we make a single rate of 15 per cent now, then items like food, which is consumed by poor people, will get hit. Touching upon the resolution of non-performing assets (NPAs) of public sector banks (PSBs), Finance Minister said that it was not possible to have a surgical solution to bad loans.

Government is trying to resolve the NPA issue of PSBs on a priority basis and has taken various steps in this regard.  Finance Minister said the Government was actively considering PSB merger as banking decisions need to be taken on commercial considerations. He added that depending on affordability, the recapitalization needs of banks would be met.

 (SOURCE: BUSINESS STANDARD DATED 01.09.2017)