The language used by both the Congress and the Bharatiya Janata Party (BJP) leaders is getting increasingly colourful to taunt each other in the public sphere in an effort to grab eye-balls.
Stung by the criticism of the Narendra Modi government’s rollout of the Goods and Services Tax (GST) in a form that Congress party leader Rahul Gandhi had dubbed as Gabbar Singh Tax, has led to FM Arun Jaitley trotting out a string of justifications that defend the new tax regime. The language used by both the Congress and the Bharatiya Janata Party (BJP) leaders is getting increasingly colourful to taunt each other in the public sphere in an effort to grab eye-balls. In similar vein, taking a dig at Rahul, PM Narendra Modi had coined the phrase grand stupid idea to describe the changes to GST that Congress was demanding. Taking off from there, Jaitley early in the morning took to Twitter and posted this message, “What Rahul Gandhi suggested was a single GST rate of 18%. This is different from suggesting a cap of 18%. This was the grand stupid idea. Can a Hawai chappal and a BMW car be taxed at the same rate?”
In fact, at an event on Thursday, Jaitley had said, “Can you have a GST in India where a Mercedes car and a hawai chappal is taxed at the same rate? That’s socially not acceptable.”
On a more serious note, FM Jaitley had yesterday hinted at merging 12 and 18 per cent tax rates under GST once revenue collections pick up. Notably, GST has as many as 4 tax slabs of 5, 12 18 and 28 per cent. There is another 5th slab, but that is at zero per cent tax, which applies to daily use essential commodities. Jaitley described what lies in the future regarding GST. He said the country would eventually move to a two-tier GST.
With GST Council cutting a number of rates recently on almost 200 items, Jaitley added, “We have thinned down the 28 per cent bracket, we can thin down more and it can be at some stage confined to luxury and demerit goods.” He added that as GST collections improve, the govt would see if there is a scope for merging 12 and 18 per cent slabs.
What the merging of these 2 slabs will mean was explained by FM Jaitley. He said some items in 12 per cent bracket will be sent to 5 per cent, resulting in two rates of 5 per cent and another ‘X’ per cent. The highest tax slab of 28 per cent will be a ‘very thin’, he said.
Taking up some really important products for the public like geometry boxes, copy books, rubber bands, which were earlier being taxed at 31 per cent., FM Jaitley said “Temporarily we parked them at 28 per cent. I had thought it would take a lot more time to rationalise it but most of them we have brought it down to 18 and 12 per cent now. So, we have started the rationalisation ahead of schedule”.