Press Trust of India Prime Minister Narendra Modi on Sunday ruled out a single tax rate under the GST, saying a Mercedes car and milk cannot be taxed at the same rate, and accepting the Congress’ demand for a uniform 18 per cent rate would lead to a spike in the taxation of food and essential items.

Modi said the GST had led to an over-70 per cent jump in indirect taxpayer base in just a year, demolished check-posts and merged 17 levies and 23 cesses into one single tax.

The new tax regime, which subsumed central levies like excise duty and service tax and State taxes like VAT, is aimed at making indirect taxation “simple” while eliminating the Inspector Raj, the PM said, adding that the GST is an evolving system which is calibrated based on feedback from state governments, trades and other stakeholders.

“It would have been very simple to have just one slab but it would have meant we could not 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 a magazine.

Modi said that against a total of 66 lakh indirect taxpayers registered since independence, 48 lakh new enterprises were registered since the launch of the GST on July 1, 2017.

“Around 350 crore invoices were processed and 11 crore returns filed. Would we be looking at such numbers, if GST were indeed very complex?” he asked. “Check-posts have been abolished and there are no queues at State borders. Not only are truck drivers saving precious time but the logistics sector is also getting a boost, thereby increasing the country’s productivity. Would this be happening if GST was complex?”

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