The finance minister said in Parliament tax rate on more products and services could be slashed if revenue increases, economy formalises
The capacity to slash the goo-ds and services tax rates on more items w-ould go up as GST revenues and the compliance rate increases and the economy formalises, said finance minister Piyush Goyal in the Lok Sabha on Wednesday.
The minister was speaking in the House after moving four bills seeking to amend GST laws for consideration and passage. The bills were central GST (amendment) bill, integrated GST (amendment) bill, GST (compensation to stat-es) amendment bill and Union Territory GST (amendment) bill.
Goyal said the “GST council has reduced rates on many items and services in the last round. We want the consumer to be burdened less by the indirect tax.” Elaborating, Goyal said in the last one year, the GST council has reduced rates on 384 items and 68 services. He said, “186 items and 99 services were exempted from GST. Also sanitary pads were exempted from GST,”.
The minister also pointed out that the government was able to collect GST in line with the country’s fiscal deficit target.
Despite reduction in GST on several goods and services, several industry bodies have been raising demands for further easing of indirect tax on several other products and services. Several government functionaries and leaders, including Bihar deputy chief minister and GCT council chief Sushil Modi have hinted time-to-time at further reduction in GST on many items as well as shrinking of tax slabs. However, they refuse the possibility of one GST slab, given the diversity of Indian economy.
Referring to the recent growth forecast about India by the International Monetary Fund (IMF), he said: “I think India’s economic growth will be better than this forecast.”
India is projected to clock an economic growth of 7.5 per cent in the 2019-2020 financial year on strengthening of investment and robust private consumption, the IMF had said in its latest report.
Noting that India was being called the ‘golden bird’, the minister said, “Now the entire world believes that India will again become the golden bird under the leadership of prime minister Narendra Modi”, adding that the reform measures undertaken by the government has benefited India and the rest of the world.
IMF, in a report published on Tuesday, said the near-term macroeconomic outlook for India is “broadly favoura-ble.” Headline inflation is projected to rise to 5.2 per cent in FY19, as demand conditions tighten, al-ong with the rec-ent depreciation of the rupee and higher oil prices, housing rent allow-ances and agricultural minimum support prices, it said. The current account deficit is projected to widen further to 2.6 per cent of the GDP on rising oil prices and strong demand for imports, offset by a slight increase in remittances, the report said.
Launching a broadside on the Congress for their noisy protest, Goyal said, “the people of this country will not forgive your party as you people are interrupting the House because you want high tax rate.” He also accused the Congress of not being serious about national security. “What you failed to do, Modiji did. In the next general elections, you may get not even get 4 seats,” Goyal said
Participating in the debate, senior Congress leader Mallikarjun Kharge said that this government does not know how to implement GST. “More than 50,000 MSME (micro, small and medium enterprises) industries closed down in Tamil Nadu alone due to faulty implementation of GST,” he stated.
The finance minister’s 45-minute speech was interrupted by Congress members who were in the well of the House raising anti-government slogans on various issues, including demanding setting up of a joint parliamentary committee to probe the Rafale jet fighter deal.