GST rate could be lower, hints Jaitley

| | Updated on: Dec 16, 2015




Also open to scrapping additional levy on inter-State trade

Keeping communication channels open with the Congress party on the Goods & Services Tax (GST), Finance Minister Arun Jaitley not only hinted at the possibility of a lower standard tax rate, but also expressed a willingness to scrap the 1 per cent additional levy on inter-State supply of goods.

Addressing an industry event on GST, Jaitley, however, remained firm on keeping the rates out of the Constitution Amendment Bill. Hitting out at the Congress for stalling the Bill, which is essential to roll out the indirect tax regime from April 1, 2016, he said the Centre would be forced to explore alternative options to conduct business.

Jaitley said it was “settled” that the standard rate would be lower than 18 per cent if not much lower, but the final say on the rates would be taken by the proposed GST Council. The Arvind Subramanian Committee had suggested a standard rate between 16.9 per cent and 18.9 per cent.

Rejecting the Congress demand to include the rates in the main Bill, he said: “Suppose there is a drought or a flood in 10 States and for one week you need to raise the tariffs, are you then going to amend the Constitution?”

“If by sheer noise and disturbance, session after session Parliament is not going to function, then it will set precedents for the future. We will enter this phase where legislative activity will become more difficult. Government business in future will have to take place essentially through executive action and through money bills,” he said.

Growth boost He also blamed the Opposition parties for trying to “stop, halt or slow down” India’s growth process.

“In the last session we were told the mood is not to cooperate…We will do it the next session,” Jaitley said, adding that the mood keeps changing. “And therefore we are at a stage today (where) we have lip sympathy for the GST, but the sympathy ends with that,” he said.

Chief Economic Advisor Arvind Subramanian said: “GST will provide a buoyant source of revenue not only in the short term but over the medium term. At a time when the fiscal situation is challenging, GST will be crucial.”

Published on January 22, 2018

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