NEW DELHI: Union minister Arun Jaitley on Sunday termed Congress president Rahul Gandhi’s idea of a single GST slab as flawed and said that it would work only in a country where the entire population had a high and similar capacity to spend.
“Rahul Gandhi has been advocating a single-slab GST for India. It is a flawed idea. A single-slab GST can function only in those countries where the entire population has a similar and a higher level of paying capacity.
Being fascinated by the Singapore model is understandable, but the population profile of a state like Singapore and India is very different. Singapore can charge seven per cent GST on food and seven per cent on luxury goods. Will that model work for India?” Jaitley said.
Jaitley, in an article titled ‘The GST Experience’, on the first anniversary of the tax being imposed, said that it could be rationalized after collections had stabilized. “The others could be taxed higher. Eventually, as the collections improve, many more items from the 28 per cent category can possibly come down. Only sin products and luxury goods can remain there,” he said.
Referring to the issue of levying GST on petroleum products, Jaitley said that while the UPA had kept petroleum products permanently outside GST, the Modi government had made them leviable under GST and could gradually impose GST when the Council decided. “For this, I would continue to make my earnest efforts, and hopefully, when the states are more comfortable with the revenue position, it would be an ideal time to strike for a consensus between them.”
He further said that while Rahul and former finance minister P Chidambaram had repeatedly demanded that petroleum products be forthwith brought under the GST regime, the finance ministers of Congress-ruled states were against it.
The minister said that when the GST was to be launched on July 1, 2017, the government was advised by the Congress to postpone it. “A reluctant government can never take reformist decisions. We went ahead. At the initial stage, we fixed the first set of rates. A large number of requests started coming from trade, industry and, therefore, we started rationalising the rates,” he added. On the GST Council, Jaitley said it was India’s first experience in cooperative-federalism-based decision-making. “We cannot afford to risk a failure and therefore, it is functioning as to arouse confidence amongst all states,” he said.
As the collections improve, many more items from the 28 per cent category can possibly come down
While the UPA had kept petroleum products permanently outside GST, the Modi government has made them leviable under GST and could gradually impose GST when the Council decided on it.
The finance ministers of Congress-ruled states are against bringing petroleum products under GST.