PM RULES OUT SINGLE RATE UNDER GST

GOVT POLICY Food, luxury items can’t be taxed at the same rate as that would raise price of essential goods, says PM

NEW DELHI: Prime Minister Narendra Modi ruled out a single tax rate under GST (Goods and Services Tax), saying food and luxury items cannot be taxed at the same rate as that would increase the price of essential food items.

“Can we have milk and Mercedes at the same rate? 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%,” the Prime Minister added in an interview to Swarajya magazine.

Modi said the success of GST lies in simplifying indirect tax, eliminating inspector raj as “returns to refund everything happens online”, and increasing the tax base.

He said in the first year itself, 48 lakh new taxpayers have signed for paying GST. A significant number when compared to the fact that only 66 lakh enterprises have registered for paying taxes since independence, the Prime Minister said.

Accepting that there are initial teething troubles when a reform such as overhauling the entire indirect tax regime in India, is implemented, Modi said that the “issues were not only identified but also addressed in real time”.

But he brushed aside criticism that GST has a complex structure.

“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? Checkposts across the country have been abolished and there

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Talking about rates, earlier many taxes were hidden. Now, what you see is what you pay. Government has reduced taxes on nearly 400 groups of items NARENDRA MODI, Prime Minister

are no more queues at state borders. 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?” he said in the interview.

Modi hailed cooperative federalism behind the success of GST finally being implemented after over a decade spent in consultations.

“The GST has seen Indian cooperative federalism at its best. We consolidated the states and developed proactively a consensus, where earlier governments had failed,” he said.

Talking about tax slabs, Modi said: “Talking about rates, earlier many taxes were hidden. Now, what you see is what you pay. Government has reduced taxes on nearly 400 groups of items.”