'Modi's GST different animal; mockery of original law proposed by us'

'Modi's GST different animal; mockery of original law proposed by us'

'Modi's GST different animal; mockery of original law proposed by us'

Former Finance Minister P Chidambaram on Thursday dubbed the Goods and Services Tax (GST) as a “mockery” because of the multiple rate structure that may add to inflation.

Sounding a word of caution, Chidambaram said he agreed with BJP leader and former finance minister Yashwant Sinha that the GST would start unravelling if state governments are allowed to exercise discretion and impose levies over and above the GST.

“The GST was envisaged as a single rate of tax on all goods and services that will replace practically all indirect taxes. What has been implemented, however, is a GST with seven or possibly more, rates. It is a mockery of GST,” the senior Congress leader told a press conference here.

Chidambaram said the Congress was convinced that the administration and businesses – especially small and medium businesses – were “under-prepared” for the roll out of GST.

“They should have done a trial run for about two months and the actual roll out should have been from 1st of September,” he said.

Chidambaram said the GST implemented by the Modi government was not the one that he had announced on February 28, 2006, as Finance Minister. “Neither Yashwant Sinha, who chaired the Parliamentary Standing Committee on Finance, nor Pranab Mukherjee of Manmohan Singh had envisaged this GST. This is a very different animal,” Chidambaram said.

The former finance minister said the Congress will press for reduction in tax rates and demand a cap of 18%, besides seeking to bring petroleum, electricity and real estate under the new tax regime.

He said the Congress party would highlight the elements of a true GST by holding meetings and conferences to emphasise that the Congress was the original proponent of the reform.

Chidambaram said a Congress-led government would have certainly worked toward a single rate with three variations and capped the GST at 18% which is “eminently feasible”.

“World over by definition the GST is a single tax... if you have ten rates, then do not call it GST. You can all it Indian Indirect Tax System or whatever,” he said.

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