Arguing that the nation was “unprepared” and “under-prepared” for the rollout of the Goods and Services Tax, former finance minister P Chidambaram on Thursday said the NDA government has made a “mockery” of the tax reform by implementing it in a hurry and with seven or more tax rates. He demanded that the rates be reduced and capped at 18 per cent which was “eminently feasible”.
He said the GST which has been implemented was “very, very imperfect” and was not the one envisaged by the UPA government. Chidambaram also announced that Congress plans to hold meetings and conferences to highlight deficiencies in the GST.
“The GST was envisaged as a single rate of tax on all goods and services that will replace practically all indirect taxes. A single GST rate means a Standard rate as well as a Standard plus rate on demerit goods and a Standard minus rate on merit goods. Some goods and services will also be totally exempt. This is the GST that the Congress and the UPA government had visualised…..(former Finance Minister) Yashwant Sinha has also confirmed that this was the GST we should have designed and implemented,” he told reporters at a briefing at the AICC headquarters.
“What has been implemented, however, is a GST with seven, or possibly more, rates. It is a mockery of GST. When we have rates like 0.25, 3, 5, 12, 18, 28 and 40, and possibly more because of the discretion vested with state governments, how can we call this a one nation, one tax regime?” he added. He said businesses wanted some more time and the rollout should have been deferred by two months and implemented after a trial run of two months.
He said implementing the GST with so many tax rates has the danger of unravelling the measure. “World over, GST is a single tax,” he said.
Chidambaram also demanded that petroleum products, electricity and real estate be brought under the GST.
Significantly, the Congress had backed the Constitutional amendment Bill in Rajya Sabha, paving the way for GST’s implementation. Asked whether he was suggesting that the GST which has been implemented was in conflict with the broad agreement his party had arrived at with the government, he said the government held discussions with the Opposition before the Bill was passed, but not after that.
“We had suggested changes in the Constitutional Amendment Bill…some changes were accepted, some were not….although we had some reservations, we agreed to pass the Bill…after that when the CGST and IGST bills were discussed in Parliament, I do not recall any discussion between the government and the Congress…” he said. He said Congress MPs had asked for a cap of 18 per cent and the government had assured their suggestions will be kept in mind when the final rates are finalised. “CGST and IGST bill are enabling bills. These details are not on the Bills. These details are by notifications,” he said.