New Delhi: Prime Minister Narendra Modi on Sunday ruled out a single tax rate under the Goods and Services Tax (GST) and said a Mercedes car and milk cannot be taxed at the same rate. He added that accepting Congress' demand for a uniform 18 percent rate would lead to a spike in food and essential items' taxation.
File image of Prime Minister Narendra Modi. Reuters
File image of Prime Minister Narendra Modi. Reuters
Modi said GST has, within one year of its launch, led to over 70 percent jump in indirect taxpayer base, demolished check-posts and merged 17 taxes and 23 cesses into one single tax. The new tax regime, which subsumed central levies like excise duty and service tax and state taxes like VAT, is aimed at making indirect taxation "simple" while eliminating the Inspector Raj, he said, and added the GST is an evolving system which is calibrated based on feedback from state governments, trades and other stakeholders.
"It would have been very simple to have just one slab but it would have meant we could not have food items at zero percent tax rate. Can we have milk and Mercedes at the same rate? "So, when our friends in Congress say that they will have just one GST rate, they are effectively saying they will tax food items and commodities, which are currently at zero or 5 percent, at 18 percent," he said in an interview to Swarajya magazine.
Modi, according to a part-transcript of the 45 minute interview posted by Swarajya on its website, said against a total of 66 lakh indirect taxpayers registered since independence, 48 lakh new enterprises have registered since the launch of the GST on 1 July, 2017. "Around 350 crore invoices were processed and 11 crore returns were filed. Would we be looking at such numbers, if GST were indeed very complex?" he asked.