Mercedes, milk can’t be taxed at same rate: PM

Prime Minister Narendra Modi on Sunday ruled out a single tax rate under the GST, saying Mercedes car and milk cannot be taxed at the same rate, adding that accepting Congress party's demand for a uniform 18 per cent rate would lead to a spike in food and essential items' prices.

PM Modi said the Goods and Services Tax (GST) has within one year of its launch led to over 70 per cent jump in indirect taxpayer base, demolished check-posts and merged 17 taxes and 23 cesses into one single tax.

"It would have been very simple to have just one slab but it would have meant we cannot have food items at zero per cent tax rate. 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 per cent, at 18 per cent," he said in an interview to 'Swarajya' magazine.

The GST, he said, has seen Indian cooperative federalism at its best. "We consolidated the states and developed proactively a consensus, where earlier governments had failed." The Prime Minister said earlier many taxes were hidden and under the GST, "what you see is what you pay.’’

Union Minister Piyush Goyal also congratulated the nation on completion of one year of GST by calling it "the most transformative tax reform in India ever".

To all this, P Chidambaram