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In an indication that prices under the Goods and Services Tax will not alter significantly, Finance Minister, Arun Jaitley, on Friday said there will be no big surprises for consumers under the new tax levy.
“Profit or profiteering is not a bad word, but unfair enrichment is. And therefore the benefit of reduction in taxation is a benefit that consumers are entitled to. And that’s not a principle that can be seriously contested,” he said at the annual general meeting of CII.
To ensure that companies pass on the benefit of tax reduction under GST to consumers, the government will also set up an anti-profiteering authority.
Jaitley’s comments come at a time when a committee of officers under the GST Council is finalising the fitment of commodities into the four-tier rate structure.
The GST Council will meet on May 18-19 when it is likely to finalise the tax incidence on each item.
Jaitley also said that the GST Council is now in final stages of fixing tariffs for different commodities.
“The formula under which it is being done has also been explained and therefore nobody is going to taken by surprise, it's not going to be very significantly different,” he said.
Meanwhile, following the Finance Ministry’s efforts to curb tax evasion, the Minister said “tough steps” have to be taken to make the country more tax compliant along with reforms to simplify the tax regime.
Defence manufacturing Outlining other plans, Jaitley, who is also the Union Minister of Defence, said that the government is in advanced stages of formulating a policy to encourage domestic defence manufacturing and cut import of combat planes, ships and submarines.
“The response that we have from domestic and international industry has been quite encouraging itself,” he said, noting that India is the world’s largest arms importer and spends about 1.8 per cent of its GDP on defence.
Foreign investment Jaitley also announced that the plan for the abolition of the Foreign Investment and Promotion Board is in final stages.
“Nearly 90 per cent of the investment in India comes under the automatic route. So for the balance 10 per cent, do we need multiple forums to give approval or do we need just one forum in one ministry?” he asked.
The Minister had in the Budget announced that the FIPB will be done away with.
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