“If all taxpayers pay their taxes, it will help bring in tax rates further low. The more the evasions and exemptions, the higher will be the tax rate. So, moderate tax rates and evasions cannot co-exist,” Jaitley told a meeting of BJP workers here. The minister was replying to a demand made by Ashish Shelar, Mumbai BJP unit president, to bring the proposed GST rate at 17 per cent. Explaining the rationale further, the minister said when more people evade taxes, it brings in an aberration in tax structures.
The proposed uniform taxation regime, GST will integrate the country into one single market by ensuring a free flow of goods and services across the country, Jaitley said, adding that in order to enable this, we should have a uniform tax rate throughout the country. The GST will ensure that taxation rates are moderate, which in turn will bring down the cost of doing business, thereby bringing down the cost for end consumers.
“You have to have one person being assessed once and not by different tax authorities in different states. This makes doing business easier,” he said. He also said that a large section of the people, who file income tax return don’t actually pay the taxes. Claiming that barring Dubai and Singapore, our tax rates are now becoming more reasonable, he said for indirect tax rates to come down further, there is a need to increase its base and to achieve that “everyone should pay their taxes”.
Stating that GST implementation was his immediate challenge, the minister said the next challenge will be strengthening the banks. “The government is working on strengthening the public sector banks and we are determined to do it,” he said.
Earlier this month, Parliament passed the much-delayed GST Bill and the Assemblies of Assam and Bihar also did the same. The Bill needs to be passed at least by 17 more states with two-thirds majority for the Bill to get constitutional validity.
The peak GST rate will be finalised by the proposed GST council comprising the Union Finance Minister and his state counterparts, even as the chief economic advisor has suggested an 18 per cent peak rate.
Delhi’s Aam Aadmi Party (AAP) Government has said that it will place the GST Bill for ratification before the Delhi Assembly during its four-day session beginning August 22 if it receives official communication about the Bill from the Centre. The AAP government has already made it clear that it is in favour of GST. Although the AAP dispensation and the BJP-led Central government have been at loggerheads on several issues, the former said that it will ratify the GST Bill in the Assembly during the upcoming session as it will increase the state government’s share in taxes.
The GST bill needs to be ratified by at least 15 state legislatures before the President can notify the GST council which will decide the new tax rate and other issues.
Export exemptions & incentives will go away once GST is in place: Govt
Commerce secretary Rita Teaotia on Saturday told the exporting community that exemptions and incentives, which were being given for promoting exports would go away once the GST was in place.
“Exemptions and incentives will go away once the Goods and Services Tax (GST) is implemented. GST and exemptions do not go hand-in-hand,” Teaotia said at a session organised by EEPC, FIEO and GJEPC here.
She said the department of revenue was getting all the suggestions and representing from various quarters on the probable impact of GST on exports. “The commerce department is not involved with the GST legislation. We will give our inputs to the finance department before everything gets finalised,” the official said.
Saying that many countries across the world were resorting to protectionist policies to protect insulate their domestic industries from suffering due to the global slowdown, the Indian government was making efforts to create a conducive environment for making country’s exports competitive.