Goods will become cheaper with GST: Arun Jaitley

Finance Minister Arun Jaitley speaks in the Lok Sabha in New Delhi

Finance Minister Arun Jaitley on Wednesday said goods may become “slightly cheaper” once all other taxes are removed after implementation of the Goods and Service Tax. Replying to a debate on the four bills related to GST in the Lok Sabha, he said all other taxes like entry tax in states will be removed once the GST is in place. “Once all other taxes are removed, goods will become slightly cheaper,” he said.

Noting that both the central and state governments are pooling their sovereignty to have this tax regime, he noted that India, despite being one political entity, remained different economic entities with states having different taxes. “India remained different economic entity. Trucks could be seen waiting outside state border, there was no free flow of goods,” the minister said.

He also clarified that commodities like food items will have zero tax.

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The minister, earlier in the day, allayed apprehensions about rise in prices of goods and commodities after the roll out of GST saying tax rates will be kept at near current levels to ensure that there is no inflationary impact.

Introducing four bills to give effect to the Goods and Services Tax, Jaitley said preparations to roll out the new tax regime is nearing completion and the process to classify categories of commodities will start next month.

The aim of the GST Council is to decide everything relating to the tax structure with consensus and this is for the first time that such an arrangement has been made, based on the principle of shared sovereignty of both the Centre and the state governments, he said.