NEW DELHI: Dismissing Opposition criticism that the current Goods and Services Tax (GST) system is too complex, Prime Minister Narendra Modi ruled out a single tax rate, saying Mercedes car and milk cannot be taxed at the same level.
“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?” Prime Minister said in an interview to a magazine.
The government on Sunday celebrated one year of GST’s rollout. According to Modi,in the last one year, 48 lakh new enterprises have been registered and 11 crore returns filed.“Around 350 crore invoices were processed and 11 crore returns were filed. Would we be looking at such numbers, if GST were indeed very complex?” he asked. “Check-posts across the country have been abolished and there are no more queues at state borders. Not only are truck drivers saving precious time but also the logistics sector is getting a boost and thereby increasing the productivity of our country. Would this be happening if GST was complex?”
Admitting there were teething troubles, the prime minister said they were identified and fixed in real time. “The reform merged 17 taxes, 23 cesses into one single tax. When it was finally introduced, it was our endeavor to make it simple and ensure sensitivity of the system. There are often teething troubles seen when a reform of this magnitude is carried out, but these issues were not only identified but also addressed in real time,” he said.GST, he said, has seen cooperative federalism at its best.