Arun Jaitley interview: FM explains various facets of GST to Zee Business.
In a freewheeling interview to Zee Business, Union Finance Minister Arun Jaitley explained about why GST has to be rolled out from July 1, about possible initial hiccups and how he thinks GST will be a real game changer. He also allays concerns about GST being inflationary in nature.
On objections to 1st July rollout:
Arun Jaitley says that GST council comprised of people from multiple political hues, Hundreds of decisions were taken with consensus. Great amount of maturity was shown by political parties, says FM. GST Council became an example of federal institution created jointly by the Centre and states together. He says despite political difference, people have showed great maturity in the past.
Arun Jaitley says that he hopes that political parties would get rid of objections. He says that it shouldn't be seen from narrow political angle and be viewed as a combined process. Jaitley says that the July 1 date was pre-decided unanimously . From a constitutional angle, there will be a taxation vacuum if the process is not rolled out by September 15. Hence it is being done two and a half months before that, after extensive discussion. Jaitley hoped that political parties should show maturity at the end, which they have shown so far.
About 'initial hiccups'
It's a disruption, as the system is changing, says Arun Jaitley. "Yes, there will be hiccups like IT systems may get overloaded but those issues are also resolved within hours. Apart from this, the way business is done in India will change and lastly, tax evasion will not be possible because of GST’s checks and balances," he said.
Objection from trade bodies:
Arun Jaitley says that GST Council worked with open mind following the policies of equivalence and revenue neutrality. There are grievance redressal systems like fitment committee which gives recommendation to GST Council. He says that decision have been reviewed for 60-65 goods. So if any one has grievance, they can reach out. But pressure technique will not work, says Arun Jaitley.
Watch the full interview here
About commodities like liquor, petrol etc being included in GST:
Arun Jaitley says the central government was looking to bring all commodities under GST, but couldn't do it owing to objection from states. However, Jaitley says that he believes sooner than later, states will agree about real estate and petroleum. Real estate sector is currently plagued by non compliance, remarks Arun Jaitley. Also for petroleum it will be beneficial for states to implement GST. Jaitley hopes that once the functioning of GSTN is normalised, and benefits are seen, states will support it.
About GST in J&K
Arun Jaitley says he is hopeful that J&K will soon comply with GST as otherwise, the consumers and traders have to pay tax twice, once on input and then on the final product. Finance Minister says that he is in talks with J&K CM regarding its implementation.
Possible inflationary effect?
Arun Jaitley says that it would not be inflationary, as tax rates are reasonable. The character of tax is not inflationary, and many goods are at 18% which could have been put in 28%.
Can tax slabs be reduced in future?
Arun Jaitley hopes that tax slabs can be reduced in future, but mentions that currently four slabs are there to check inflation and ensuring poor people don't suffer.
About Air India's privatisation:
Arun Jaitley says it is unfair that tax payer's money should be spend to use for funding deficit of Air India, which can be used for healthcare and other social schemes. He ruled out any political fallout of Air India's privatisation.
About H1B issue:
FM says India will take it up with USA. He also mentions Indian citizens in USA are not illegal migrants and they are highly skilled workers. Hence they shouldn't be equated with illegal immigrants.
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 "Arun Jaitley")
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