A 5-tier GST is not an ideal taxation regime, says Montek Singh Ahluwalia

Mumbai: Montek Singh Ahluwalia, former deputy chairman of erstwhile planning commission, has said that the five-tier tax rate incorporated under proposed Goods and Services tax regime was not an ideal taxation method, The Times of India reported.

Under the proposed tax structure of GST, lowest 5 per cent and highest 28 per cent tax rates have been included for implementing uniform tax rate. Besides, tax rates of 12 per cent and 18 per cent are also part of the draft legislation.

Ahluwalia headed the top plan body under former prime minister Manmohan Singh who led the United Progressive Alliance government for two terms.

The GST Council, nodal agency for GST related matters, in next three or four years must work towards plan to make GST a single uniform tax across the country, he said.

“Ideal GST has some exemptions and one single rate,” TOI quoted Ahluwalia as saying. According to Ahluwalia the GST Council must work on this agenda that over next 3-4 years they will clean up "multiplicity of rates".