Bring new GST with single low rate as starting point: Congress

Saying that the current GST regime has “serious birth defects”, Congress, for the first time on Friday, said it should be repealed and replaced by a new law that provides a “single lower rate” as a “starting point”. And then “work the next steps”.

Veteran Congress leader Jairam Ramesh called for a discussion in Parliament and called on the government to convene an all-party meeting. Some “tinkering” here and there won’t work, a fundamental change is needed, he said.

Speaking at a press conference with Ramesh, former finance minister P Chidambaram said there were “serious birth defects” in GST and “these defects have gotten worse in the last five years and everyone touched by GST has been seriously injured.”

“The first thing to do is get rid of these six (tax) rates. You must have a single low rate. That is GST. Globally, this is GST… it should be a single low rate. This is the starting point যদি if you make a mistake at the starting point, your whole journey will be wrong. So let’s cancel this GST. Let’s go back to the drawing board, let’s start with the single low rate. And then we work on the next steps, ”Chidambaram said.

Interestingly, the Congress in its Udaipur Conclave was largely silent on the GST, even demanding that it be reviewed or even repealed by law. A number of senior leaders, including former Union Minister Anand Sharma, Manish Tewari and Mani Shankar Aiyar, raised these views during the Chidambaram-led group’s discussion on economic issues, in addition to Praveen Chakraborty, head of the AICC data analysis department. But Chidambaram argued that the withdrawal was a very radical idea and that it needed to be discussed at a different party level as it was outside the party’s mandate.

On Friday, Chidambaram said: “There is a lot of irrationality in this law … it is very difficult to amend the law, you have to replace the law”. For example, he said, “the two authorities have serious problems with taxes.”

“Half of the taxpayers come under the jurisdiction of the Center and half come under the jurisdiction of the States. This is a vertical section, where logically, if you have to share administrative powers, it has to be a horizontal section. Small taxpayers, small traders do not have to go after the central tax collector, ”he said.

“The law is so flawed that the government has been forced to issue hundreds of executive orders. In five years, the government has issued 69 notifications, 143 circulars and 36 orders. This is a change every second day. It’s a GST that’s flawed, flawed and volatile, ”he said.

“The so-called GST that is in force today was not a GST planned by the UPA government. The GST envisaged by the UPA was single, with some discounts on all products and services at low rates, ”he said. “The GST we have today is a complex web of many rates, conditions, exceptions and exemptions that will completely confuse even an informed taxpayer. Not all registered dealers are informed taxpayers; As a result, they are at the mercy of tax collectors, ”he said.

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He said that faulty GST has led to mass destruction of MSMEs. The worst consequence, he said, is a complete breakdown of trust between the center and the states. He argued that the GST Council was ineffective and that the finance ministers of the states, including the BJP-ruled states, were dissatisfied.

“There is no real consensus at the GST Council meeting. The diagonal formula of voting rights between the Center and the States has been used by the Center to push for decisions which are bitterly opposed by the states, privately, including the BJP-ruled states. The retention of compensation cess arrears and the additional recourse to cess (instead of distributable tax) have widened the rift between the two parties, ”he said.

He said Congress, if it comes to power in 2024, would “work towards replacing the current GST by GST 2.0 which will be a single, low rate.”

Regarding the GST arrears, Chidambaram said: “We do not know the truth. According to the Center, it has directed to pay all arrears by May 31, 2022 Only June shares have to be paid According to the states, they think there are huge arrears… unless the General Accounts Controller, or, better, the Comptroller and Auditor General, does not publish a specific report on how much was collected and how much was distributed each year. Whether it is undershared or overshared, we do not know – sitting in the opposition, there is no way to know. The states say they are in arrears, and the Center says we have cleared them. “

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