Arvind Subramanian-led panel recommended standard rate for GST at 17-18 %

Dec 7, 2015 11:50 IST

The Chief Economic Advisor Arvind Subramanian led panel on 4 December 2015 submitted its report on Possible Tax rates under Goods and Services Tax (GST) to Finance Minister Arun Jaitley.

The commission recommended standard rate for GST at 17 to 18 percent, the rate at which most products would likely be taxed. The Committee has suggested doing away with a proposal to levy a one percent inter-state tax on transfer of good.


The committee excluded real estate, electricity and alcohol and petroleum products while calculating tax rates but has suggested bringing them under the ambit of GST soon.

Highlights of Recommendations
• It recommended a range of 12 to 40 percent for various products and services.
• Revenue Neutral Rate (RNR) proposed at 15-15.5% (Union and states combined).
• Include petroleum and alcohol in GST regime.
• Impact on inflation expected to be minimal.

The committee, however, did not favour putting the GST rate in Constitution Amendment Bill.

If implemented, the GST will help in cleaning up the tax system in India making it best in the emerging market economies and high income countries.

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