State Finance Minister Amit Mitra on Thursday criticised Prime minister Narendra Modi for deciding on GST rates for luxury goods before the GST Council meeting.
“It has been reported in the media that Prime Minister Narendra Modi recently made a statement that only 0.5 per cent to 1 per cent of the items — luxury goods such as aircrafts, cigarettes, alcohol and SUVs — will be taxed at 28 per cent. However, it is the GST Council alone which has been constitutionally empowered to decide on GST rate for goods and services. The statement made by the Prime Minister on December 18 just before the GST Council meeting on December 22 undermines the constitutional authority of GST Council as it pre-empts the decision making authority of the Council,” said Mitra at the state secretariat.
The state finance minister, who is also a member of the GST Council, further said that the neutrality of the Council in decision-making has been severely eroded and will be highly detrimental to the future functioning of the GST Council.
Mitra also said that the demand to reduce the rate of all items other than luxury goods and sin goods from 28 per cent GST rate to 18 per cent in the GST meeting held on August 4. “It is now surprising that the Prime Minister is now demanding what we had urged the Union government to do long time back,” he said.
Hinting at further pruning of the list of items in the peak 28 per cent GST slab, Prime Minister Narendra Modi had said Tuesday that his government wants to ensure that “99 per cent” items are taxed at 18 per cent or below.
Ahead of the GST Council meeting Saturday, Modi indicated that the 28 per cent slab will be restricted to just a few items, and that only 0.5 or 1 per cent of the total 1,200-odd items will continue to remain in the peak slab, comprising essentially luxury items such as big cars, aircraft and demerit goods such as cigarettes.