India’s transition to GST has been fairly smooth: Jaitley

PTI Washington | Updated on January 27, 2018 Published on October 10, 2017

Finance Minister addresses CII-US Chambers of Commerce meet in New York

India’s transition to the Goods and Services Tax regime has been “fairly smooth” despite attempts by “ill-informed” Opposition leaders to derail its implementation, said Finance Minister Arun Jaitley.

Jaitley, who is on a week-long visit to the US to attend the annual meetings of the International Monetary Fund and World Bank, said under the GST, the government has unveiled attractive schemes to ensure that the non-compliant in India become compliant.

“Many attempts have been made by political groups to derail the GST, but I am glad that their own State governments are not listening to them because they know 80 per cent of the money is going to come to them so they don’t have to appease an ill-informed central leader of the party and let the revenues of their own State suffer,” Jaitley told a New York audience.

“So, the State governments are being wiser,” Jaitley said in response to a question during an event titled ‘India’s market Reforms: The Way Forward’ organised by the Confederation of Indian Industry in association with the US Chambers of Commerce.

The obvious problem in the GST, he said, is going to be that the non-compliant are going to eventually come in to the net.

“And therefore there are going to be different complaints — some legitimate some manufactured, thrown up by the non-complaint how GST is creating a problem for them,” he said, adding that the government needs to have capacity to distinguish between a genuine and a manufactured complaint.

The GST Council, according to Jaitley, is India’s first genuine federal institution, which meets every month.

“It’s been a fairly smooth transition,” he said.

“So the lowest slab in India is five per cent, which doesn’t exist anywhere in the world. That is because of the non-compliant tax character of the Indian society. You make it easy for people to enter the taxation system that you are able to expand. In the GST, for up to 10 million turnover we now have a scheme for them,” he said.

“We are trying to bring them into the tax net because the first two months’ data has shown that almost 95 per cent of the tax is just being paid by 400,000 accesses. Therefore, it’s very top heavy in terms of payment. And there’s a need to continue to expand the tax base at the bottom itself,” he said.

Earlier, Jaitley responded to a question on the biggest challenges for the GST during a conversation with Dan Schulman, president and CEO of Paypal and Chandrajit Banerjee of the CII.

At the event, Jaitley said global integration of the Indian economy is happening at a time when other economies are becoming more protectionist.

Asserting that India is now a better place to do business with because of the series of steps being taken by the government in the last three years, Jaitley said procedures have been simplified.

Now as much as 95 per cent of the investments are through automatic route, and foreign investment promotion board has been abolished, he noted.

India is now capable of taking big decisions and implementing them at a large-scale, Jaitley said adding that as many as 250 highways projects are under construction.

India is now having surplus power and the capacity of Indian ports have been expanded, he said.

Published on October 10, 2017
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