INDIA’s Economic Goal Is Not Disrupted By GST: Arun Jaitley

INDIA has observed one year of implementation of Goods & Services Tax introduced on July 1, 2017. Government has gone on record saying that it does not agree with the main opposition’s accusation that GST has halted the country’s economic development. Refuting the allegation, Arun Jaitley, who was entrusted with the Himalayan task to get GST okayed in Parliament and then implementing it nation-wide in his capacity as the Finance Minister, says the roll out of the innovate tax regime has not been disruptive in the last one year adding that higher revenue collections would enhance the capacity of the Government to rationalise tax rates going forward. The  lawyer turned  politician now a Union Minister  without  portfolio since he is  recovering  from  kidney  transplant, Jaitley said  GST has positively impacted  GDP growth, ease of doing business, expansion of trade and industry, Make in India initiative and promoting honest business practices .Summarily rejecting  a single rate GST being advocated by Congress President Rahul Gandhi as “flawed”, Jaitley  says that it can only work in a country where the entire population has ‘similar and high’ capacity to spend.GST  subsuming 17 local taxes was introduced on July 1, last year. As of now, over 1.14 crore businesses are registered under the new tax regime, he says.Jaitley said he too had apprehended that GST it would cause disruption in the Indian economy.“I myself used to use the word disruptive when it came to major reform like GST because it takes time to settle down. But after one year of experience I’m not too sure whether I can use the word disruptive for GST reform. The smooth manner in which the changeover has taken place is almost unprecedented anywhere in the world.” The  economy has seen “effective gains” of GST roll out in the last year. “…The best of GST, in terms of its contribution to society, is yet to come,” Jaitley said. In the current fiscal, mop up from GST topped Rs 1.03 lakh crore in April, Rs 94,016 crore in May and Rs 95,610 crore in June as per an official statement. “As the tax collection goes up, the capacity to rationalise the slabs, the capacity to rationalise the rates, also will certainly increase. And therefore that capacity to rationalise will increase once the total volume of tax collected significantly increases,” Jaitley said.Stating that the input tax credit itself is an effective route for ensuring that people make their disclosures faster, Jaitley said once you have a more efficient tax system it will ensure that evasion does not take place. “The e-way bill has already been implemented and once the invoice matching comes in, evasion and detection of evasion itself will become far simpler itself,” he said.

In an article titled ‘The GST Experience’ on completion of first year of the roll out of the new indirect tax regime, he said the key areas of future action will include further simplifying and rationalising the rate structure and bringing more products into the GST. “I am confident that once revenue stabilises and the GST settles, the GST Council will look into these carefully and act judiciously.”

He said since GST is a regressive tax, the poor have to be given a substantial relief, he said, stressing that most food items – agricultural products and the Aam Aadmi products have to be tax exempt while some others have to be taxed at a nominal rate.“Rahul Gandhi has been advocating a single slab GST for India. It is a flawed idea. A single slab GST can function only in those countries where the entire population has a similar and a higher level of paying capacity.“Being fascinated by the Singapore model is understandable but the population profile of a state like Singapore and India is very different.  Singapore can charge 7 per cent GST on food and 7 per cent on luxury goods. Will that model work for India?,” the minister questioned the Opposition.

 

Leave a Reply

Your email address will not be published. Required fields are marked *