India may not move to single GST rate structure:Jaitley

India may not move to single GST rate structure:Jaitley

Union Minister Arun Jaitley, on Sunday, said the GST Council is in the process of rationalising the tax rates and bringing most of the items below the peak rate of 28% but regretted that India may not move to a single GST rate structure any time soon unlike the western world where the rich and poor divide is not so wide. PTI file photo

Union Minister Arun Jaitley Sunday made his first public appearance in the past more than two months for a 'special address' to the first anniversary of GST implementation.

He addressed the 'GST Day' from his home through video conferencing and the hailed the new indirect tax system for being least disruptive in the Indian context.

Jaitley, who is recovering after a kidney transplant surgery on May 14, spoke for about 30 minutes during which he took no break. Although the minister looked a bit exhausted, which officials said was “obvious” after a critical surgery. He sounded as usual.

Earlier, Goyal said the minister was “recovering well”.

Jaitley devoted a better part of his speech in analysing why the country's biggest indirect tax reform failed to take off during the UPA regime.

“The UPA Government lost the confidence of the states when it asked the states to abolish CST but failed to compensate them for the losses incurred in the process,” Jaitley said adding when he took over in May 2014, he agreed to compensate the states, paid the amount and states moved further on GST.

The second reason why the UPA failed was they did not address the apprehension of states about the loss in their revenues in the transition period of GST. The NDA promised a 14% increase in revenue for the first five years for any loss of revenue. “The states jumped for this proposal and we succeeded in winning the trust of the states back for the GST enactment,” the minister said.

Former Finance Minister P Chidambaram, however, tweeted that the UPA failed only because the BJP opposed GST “tooth and nail and obstructed it until five years till May 2014”.

Jaitley also flayed Congress President Rahul Gandhi for advocating a single slab GST for India. “It is a flawed idea. A single slab GST can function only in those countries where the entire population has a similar and a higher level of paying capacity. Being fascinated by the Singapore model is understandable.. will that model work for India?... the poor have to be given a substantial relief...,” he said.

Earlier, talking to a private magazine, Prime Minister Narendra Modi too dismissed the idea of a single rate structure. “Can we have milk and Mercedes at the same rate,” he asked.

Jaitley said the best of GST in terms of contribution to the society was yet to come.

Jaitley has so far presided over 27 GST Council meetings, including the last one, on June 10, from his residence through video-conferencing. Apart from GST meeting, the minister has interacted with his officials and other ministerial colleagues on different issues through video-chat.

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