The Centre’s latest proposal to overhaul the Goods and Services Tax (GST) has been described as “bold and attractive” by former CBIC Chairman Vivek Johri, who said it would be difficult for anyone familiar with GST to dismiss it outright.Speaking to CNBC-TV18, Johri noted, “The proposed rate structure is balanced, bold, and simplifies GST to a great extent.”Johri explained that the numbers suggest the package is largely revenue-neutral. “If half or more of goods in the 28% slab drop to 18% and the balance moves up to 40%, then overall it is not a revenue-losing proposition. In fact, there may be a marginal gain,” he said.
He added that while the 12% bracket contributes about ₹1.02 lakh crore, moving it down to 5% would cause a loss of ₹60,000 crore, but the broader structure still balances out.Importantly, Johri pointed out that the proposal would ease compliance and cut down disputes while providing relief to labour-intensive sectors like garments, footwear, leather, marine products, and possibly gems and jewellery. “This will boost domestic demand,” he said.
Najib Shah, also a former CBIC Chairman, agreed that the proposal was audacious and would initially overwhelm the GST Council.“Everyone has been seeking slab reductions, but no one expected such a dramatic announcement. The key concern will be revenue. States will need to be assured that revenues remain stable,” he said.On the issue of the compensation cess, Shah was categorical: “I think it has to come to an end. We need other ways of compensating states if needed.”On tobacco and related sin goods, Shah said 40% would be the ceiling, but tobacco may be treated differently. “For cigarettes and tobacco, we already have multiple other levies, including central excise, so tobacco may be a different case altogether,” he noted.Both Shah and Johri stressed that state-level revenue concerns will shape the debate. The impact will vary depending on whether a state is consumption-heavy, importing, or exporting. They also flagged that reclassification of goods will not be easy, with political perspectives determining what is seen as luxury, aspirational, or essential.Johri summed up the mood ahead of the GST Council meeting by saying, “The proposal is difficult to reject outright because of its boldness and the simplification it promises. It will boost revenue productivity and simplify matters for taxpayers. Overall, I think it is a healthy discussion to have.”Watch the video for more
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