The Goods and Services Tax has completed its one year of implementation, and Congress states it BJP's failure and asking why not single GST rate. On Sunday, responding to Congress question, PM Modi ruled out a single tax rate under GST, saying Mercedes car and milk cannot be taxed at the same rate adding that accepting Congress party' demand for a uniform 18 per cent rate would lead to a spike in food and essential items' taxation.
PM Modi said the Goods and Services Tax (GST) has led to over 70 per cent jump in indirect taxpayer base within one year of its launch, demolished check-posts and merged 17 taxes and 23 cesses into one single tax.
"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?” said PM Modi.
"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 in an interview to 'Swarajya' magazine.
"Around 350 crore invoices were processed and 11 crore returns were filed. Would we be looking at such numbers, if GST were indeed very complex?" he asked. "Check-posts across the country have been abolished and there are no more queues at state borders. Not only are truck drivers saving precious time but also the logistics sector is getting a boost and thereby increasing the productivity of our country. Would this be happening if GST was complex?"
The GST, he said, has seen Indian cooperative federalism at its best. "We consolidated the states and developed proactively a consensus, where earlier governments had failed." The Prime Minister said earlier many taxes were hidden and under the GST, "what you see is what you pay."