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On first anniversary of GST, BJP lauds tax regime as Congress cites job losses

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Finance minister Arun Jaitley makes first public appearance since kidney surgery to address press meet on tax regime via video link.

New Delhi: The Congress and the Bharatiya Janata Party (BJP) sought to offer two varying images of the goods and services tax (GST) as the tax regime completed a year Sunday. While the former criticised the GST for the “resulting job losses”, the BJP hailed its impact on the ease of doing business in India.

Leading the Congress’ onslaught was former finance minister P. Chidambaram, while the latter’s charge was spearheaded by Prime Minister Narendra Modi, finance minister Arun Jaitley, and Piyush Goyal, the interim finance minister.

The tax has been criticised by the Congress since its launch on 1 July 2017, in a historic midnight session of Parliament, for being a “warped” version of the system conceptualised under the UPA government.

Over the past year, the party has accused the NDA government of poor implementation of GST, saying it had shut down businesses and resulted in job losses.

On Sunday, Chidambaram said the government did not have enough talent to manage something like GST. “So far, Mr Fixits have been at work in reforming GST,” he said.

“The government did bad things in a big way (demonetisation) or big things in a bad way (GST),” added Chidambaram. “The design, structure, infrastructure backbone, rate or rates and implementation of GST were so flawed that GST has become a bad word among business persons, traders, exporters and common citizens,” he said.

Chidambaram accused the government for the “ensuing job losses in various sectors”. As an example, he cited Tamil Nadu, where the state industry minister said 50,000 small and medium enterprises shut down in 2017-18 and five lakh jobs were lost.

Punjab finance minister Manpreet Badal, also present at Chidambaram’s press meet, attacked the BJP government for suppressing voices of dissent in GST council meetings that are attended by the finance ministers of all states.

“This is not a hidden fact that with governments in maximum states, the BJP has a strong majority in the GST council,” said Badal. “We raise our concerns but dissenting voices are ignored in the meeting.”

The Congress supports the concept of GST as such, but wanted the government to cap the rates at 18 per cent. In the current structure, in case of certain goods, the rate extends to 28 per cent. The implementation has also been criticised on the grounds that the monthly filing of GST transaction details is proving a tough task for traders and the business community.

The duo also criticised the Centre over the rise in petrol and diesel prices, with Chidambaram suggesting that “petroleum and electricity products”, so far excluded from GST, be brought under the ambit of the tax regime.

“Petroleum and electricity products form 50 per cent of the economy and if you are not bringing them under GST, it means half of your economy is out of your ‘one tax’ system,” said Badal.

‘Enhancing productivity’

Meanwhile, addressing his first press meet, albeit by video link, since resuming work after his kidney transplant, Jaitley said GST had helped in boosting direct tax collections in the April-June quarter of this fiscal.

While advance personal income tax collection in the quarter had increased 44 per cent, advance corporate tax went up 17 per cent, he said. The minister said that the total indirect tax collection for the nine-month period in the previous financial year after the implementation of GST stood at around Rs 8.2 lakh crore, which, if extrapolated to the whole year, would amount to about Rs 11 lakh crore – an 11.9 per cent increase.

Looking a bit frail but relaxed, the FM added, “The long-term impact of GST on India’s GDP growth, on ease of doing business, on expansion of trade and business and make in India and honest trade and business centres, is going to be significant. I’m confident that the best of GST in terms of its contribution to society is yet to come.”

Rationalisation of tax rates and bringing more items out of the 28 per cent slab would be the focus of the government, Jaitley said, adding, however, that India, with its size and population, would not be able to move towards a single GST rate anytime soon.

In the last one year, GST rate for 328 items has been reduced. At present, only 49 items attract the peak rate.

Calling GST a game-changer that had acted as “Ram Setu” in integrating the country, Goyal said the consumer had become more aware now. Goyal added that the government would soon set up a helpline to register complaints in case traders were reluctant to give proper bills on transactions.

PM Modi, on the other hand, hailed the tax as a tool that has brought growth, simplicity and transparency.

“It is boosting formalisation, enhancing productivity, furthering ‘Ease of Doing Business’, benefitting small and medium enterprises,” the Prime Minister tweeted.

In India, there are four tax slabs – 5, 12, 18 and 28 per cent – under GST. However, there are several items, including food products, newspapers and even bindi and kajal, that attract zero per cent tax while raw gold is taxed at 3 per cent.

Many have argued that the multiple tax rates make it a flawed GST.

With PTI inputs

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