Despite maintaining that the Goods and Services Tax (GST) Bill could be a model for the 21st Century, Chief Economic Adviser Arvind Subramanian Monday rued that the system was far from being “flawless” since subjects such as real estate and alcohol remained outside its realm. Subramanian was speaking at an orientation programme at the Delhi Assembly, which, according to speaker Ram Niwas Goel, was to help MLAs understand the Bill and its scope.
Subramanian said the GST Bill, in its present form, was the “best and model” for such a taxation policy in the 21st Century and an instance of “cooperative federalism”, but admitted it still had “too many subjects outside its realm to make it flawless”. He also said that in India, the problem of black money was linked to “land and real estate, gold, alcohol, politics and cash”.
Jokingly evading any talk of politics, he said his “big hope for the GST” was “self-policing”. But by “keeping alcohol and land outside GST”, a “good anti-corruption device” that would aid in “governance” was lost, he said. “I really think that over time, we should try and bring land and real estate and alcohol within GST,” he said. Deputy CM Manish Sisodia, meanwhile, said the “liquor lobby and real estate lobby” had been “successful in intervening” and that the two were kept outside the GST was because “politicians and influential people are involved in real estate… A number of political leaders have put their black money in these businesses”.
While “conceptually” the GST was a “great idea” with particular benefits for Delhi — due to its service-oriented economy — it had “problems”, Sisodia said. He added that he was surprised that all state governments — ruled by BJP, Congress and others — had unanimously “rejected” the AAP government’s proposition to keep real estate within the GST.
Subramanian also spoke about the macro-economic consequences of the Bill and said there would be several benefits. He said, “Centre and states have come together to share our sovereignty… There will be… conflict. But the nice thing is we can sit and discuss.”