PM Narendra Modi: Mercedes, milk can't be taxed at the same rate

Prime Minister Narendra Modi has ruled out a single-tax rate under GST, saying Mercedes car and milk cannot be taxed at the same rate.

He said that accepting the Congress' demand for a uniform 18 per cent rate would lead to a spike in food and essential items' taxation.

The PM said GST has, within a year of its launch, led to over 70 per cent jump in indirect taxpayer base, demolished check-posts and merged 17 taxes and 23 cesses into one single tax.

He said the new tax is aimed at making indirect taxation simple while eliminating inspector raj.

"It would have been very simple to have just one slab but it would have meant we could not have food items at zero per cent tax rate. Can we have milk and Mercedes at the same rate?" he said in an interview to 'Swarajya' magazine.

"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 per cent, at 18 per cent," he said.

Modi said against a total of 66 lakh indirect taxpayers registered since Independence, 48 lakh new enterprises have registered since the launch of GST on July 1, 2017. "Around 350 crore invoices were processed and 11 crore returns filed. Would we be looking at such numbers if GST were indeed very complex?" he asked.

He said GST was a massive change, requiring a complete reset of one of the worlds largest economic systems.

"There are often teething troubles seen when a reform of this magnitude is carried out, but these issues were not only identified but also addressed in real time," he said.

On the first anniversary of the GST regime, Modi also hailed, on Twitter, the tax as a tool that has brought growth, simplicity and transparency.

"It is boosting formalisation, enhancing productivity, furthering 'Ease of Doing Business', benefitting small and medium enterprises," the PM tweeted.

In his recent Mann Ki Baat radio address, Modi had described GST as a fine example of cooperative federalism.

He had termed it as a "festival of honesty" which has ended 'inspector raj' in the country.

The design, structure, infra backbone, rates & implementation of GST were so flawed that it has become a bad word
P Chidambaram, Congress leader

There was no disruption and economic growth was not affected. I would like to tell P Chidambaram that angoor khatte hain
Piyush Goyal, Finance Minister  

BEST IS YET TO COME: JAITLEY

Union Minister Arun Jaitley said the best of GST was yet to come. India has been able to implement the major indirect tax reform in a least disruptive manner, he said in his public address in two months.

‘RISE IN GST COLLECTION’

GST revenue mop-up rose to Rs 95,610 cr in June from Rs 94,016 cr in the previous month, Finance Secretary Hasmukh Adhia said. In April 2018, the collections from GST were over
Rs 1.03 lakh cr.

(With PTI inputs)