GST - I'm game; are you? - FM asks Congress
THE FM has launched a blistering attack on the Congress Party - Dissent or Disruption - The Congress Party's Position on GST.
He has used the forum of facebook for this as obviously he is not getting an opportunity to reply through Parliament.
The FM says that it was Mr. P. Chidambaram who first mooted the idea of GST in his Budget Speech of 2006-07. The Constitution Amendment Bill, 2011 was introduced by Mr.Pranab Mukherjee.
The FM says GST is to simplify the complex indirect tax structure in the country. The present system involves multiplicity of taxes, absence of uniform rates of taxation, and the cascading effect of “Tax on Tax”. It is also an impediment in the seamless transfer of goods and services across the country. The GST simplifies the indirect tax regime. It seeks to reduce cost of production, inflation, multiplicity of taxes and uneven taxation rates.
He has answered the objections raised by Congress Members of the Select Committee.
1. GST rate of 18%: This suggestion was not in the Bill proposed by Shri Pranab Mukherjee. When Shri P. Chidambaram negotiated with the Empowered Committee, this suggestion did not exist even then. The rates of taxation are usually not fixed in the Constitution, more so when we live in a dynamic world. The rates have to be recommended by the GST Council depending on various factors such as economic conditions, revenue buoyancies etc. and incorporated in the GST laws.
2. No GST on Inter unit transfer: There was no such proposal in either Mr.Pranab Mukherjee's bill nor in the proposal approved by Mr. Chidambaram. In any case, GST charged on supply of goods and services would be VATable and not have any cascading effect.
3. Share of local bodies in the revenue buoyancy should be a part of the proposed constitution amendment: This goes contrary to the 73rd Amendment to the Constitution which provided for setting up State Finance Commissions which have the responsibility of making such recommendations. In any case, neither Mr. Pranab Mukherjee nor Mr. Chidambaram had accepted any such proposal.
4. Electricity, tobacco products and alcohol for human consumption should be given the same treatment as petroleum in the Amendment bill.: This was not a proposal mooted by any of the Congress Finance Ministers. A consensus with the States would be effectively broken if this suggestion of the Congress is accepted.
5. Deletion of a two years transient provision which provided for an additional tax of 1%: This provision has been added in order to allay the fear of the manufacturing States which felt that they would initially lose some revenue. This is based on a unanimous decision of the Empowered Committee to which all Congress ruled States have agreed.
The FM asks, Should Congress party's obstructionist tendencies inflict an economic injury on the country?