BJP U-turn: In July, Modi Said Single Tax Rate Under GST Not Feasible; Now, Jaitley Says India Should Move Towards It
The Congress party has consistently reiterated the demand of implementing a standard rate of 18% or less under GST.
On the first anniversary of the implementation of Goods and Services Tax (GST) on July 1 2018, Prime Minister Narendra Modi had ruled out the possibility of implementing a single rate under the tax regime. He even cited the example of a ‘Mercedes car and milk’, saying that the two cannot be taxed at the same rate.
Come December 24 2018, Finance Minister Arun Jaitley notes on his blog that “a future roadmap could well be to work towards a single standard rate instead of two standard rates of 12% and 18%” under the GST.
Further, the minister wrote that the country should eventually have a GST which will have only “slabs of zero, 5% and standard rate with luxury and sin goods as an exception”. Interestingly, he ended his blog post by saying, “Irresponsible politics and irresponsible economics is only a race to the bottom.”
Congress president Rahul Gandhi and former finance minister P Chidambaram have repeatedly stated in the past that GST should have “started with 18 per cent as the standard rate.”
Reacting to the Congress party’s demand, Modi told Swarajya Magazine in an interview earlier in the year that “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%, at 18%.” Clearly, Finance Minister Jaitley seems to disagree with Modi on the issue.