Prime Minister Narendra Modi ruled out a single goods and services tax (GST) rate saying milk and Mercedes cars could not be taxed at the same rate and slammed Congress for suggesting a single rate which would make commonly used food items more expensive.
“It would have been very simple to have just one slab but it would have meant we could not have food items at 0% tax rate. Can we have milk and Mercedes at the same rate?” Modi asked in an interview to ‘Swarajya’ magazine even as the NDA government marked July 1 as ‘GST Day’. The ambitious tax reform measure was launched on July 1last year.
“So, when our friends in Congress say that they will have just one GST rate, they are effectively saying they will tax food items and commodities, which are currently at zero or 5%, at 18%,” Modi said.
The government is confident that the tax rate has stabilised and did not create large-scale disruptions as feared as it came close on the heels of the demonetisation drive. It has also not stoked price pressures as had been expected bringing much needed relief for the government battling criticism for implementation hurdles in rolling out the ambitious tax measure. Detailing benefits of GST, Modi said there was a big addition in number of enterprises registered which from independence until recently stood at 66 lakh. “In just one year after the introduction of GST, the number of new enterprises registered is 48 lakh. Around 350 crore invoices were processed and 11 crore returns were filed. Would we be looking at such numbers, if GST were indeed very complex,” he asked.
He said checkposts across the country have been abolished and there are no queues at state borders any more. “Not
only are truck drivers saving precious time but also the logistics sector is getting a boost and thereby increasing the productivity of our country. Would this be happening if GST was complex,” the PM said.
Asked whether GST was linked to his economic philosophy of minimum government, Modi said, “GST has been designed to end inspector raj with the help of information technology. From returns to refunds everything happens online.”
source: TOI
