To simplify GST, drop the 28% slab: Outgoing Chief Economic Advisor Arvind Subramanian

Removing the highest GST slab i.e. 28% and having a uniform rate of cess should be the first step in simplifying the goods and service tax (GST), outgoing Chief Economic Advisor Arvind Subramanian said.

“I think the 28 per cent rate has to go. The cesses may have to remain, but there should be just one rate on cesses… Today, we have GST rates of zero, 3 per cent (for gold), 5 per cent, 12 per cent, 18 per cent and 28 per cent. We need to rationalise but I think at the first instance the 28 per cent should go,” Subramanian said, as reported by The Indian Express.

Subramanian had decided to quit from the post, cutting short his tenure by almost a year. Subramanian will go back to the US on account of “pressing family commitments”.

His extension was to end in May, 2019. Subramanian, 59, had joined the government as the economic advisor on October 16, 2014 for a period of three years. In 2017, his term was extended by over a year.

Earlier in the day, Union minister Arun Jaitley announced in his blog post titled ‘Thank you Arvind’ Subramanian’s decision to leave the advisor’s role and go back to the US.

“Few days ago CEA met me over video conferencing. He informed me that he would like to go back to the US on account of pressing family commitments,” said Jaitley who is recovering from a kidney transplant.

Speaking to reporters later in the day, Subramanian said that the criteria for choosing his successor should be just competence and not his origin or loyalty. “The criteria should be competence, competence, competence. For every job you should get the best person,” he said.

CEA will be leaving for the US “over next the one month or two. No firm date has been finalised yet”.

Subramanian’s early return to the US comes one year after another foreign educated Indian-American economist Arvind Panagariya quit prematurely as head of Niti Aayog. Raghuram Rajan, who joined as CEA and went on to become RBI governor, was the first to go in 2016. He was not offered second term.

Talking to reporters, Subramanian described his job as “the best job I ever had, not without controversies sometimes”.

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