A day after the Goods and Services Tax (GST) Council approved dramatic changes to the tax regime and a reduction of tax slabs for over 178 items, the chief of the Group of Ministers that had recommended the revisions and Assam Finance Minister, Himanta Biswa Sarma, said there would be a “constant endeavour to do away with the 28% slab.”
Speaking to The Hindu , Mr. Sarma termed the opposition, especially former finance minister P. Chidambaram’s contention that the changes had been made with an eye to Assembly polls in Gujarat was “childish.”
‘It’s childish’
“Mr Chidambaram’s view is childish. As former finance minister he must be aware that when the GST regime was implemented in July this year, a decision to set up a GoM that would review the tax slabs as and when required was already taken and the decisions in the last meeting were based on that,” he said.
“To say that the decisions taken on Thursday were with an eye on any election is wrong. As a former finance minister, Mr. Chidambaram should know better than to attribute political motives to the GST Council, which is constituted by finance ministers of all states, where decisions are taken wholly by consensus,” Mr. Sarma said.
On the issue of recalibrating rates, Mr. Sarma was clear that more than a recalibration, it was reduction. “The review of slabs found that many items in the 28% slab should be in the 18% slab and those in the 18% slab should have been in the 12% slab. It will be a constant endeavour to review the rates further and attempt to do away with the 28% slab altogether. Once we achieve revenue protection and buoyancy under other slabs” he said.
While dismissing that the revision was due to pressure from the Opposition, Mr. Sarma said “feedback from the ground” and “the structure of the GST as it is, had led to the revisions”.
“This (review) is because GST is basically VAT plus excise duty and the latter along with customs duties is levied under the Harmonised System of Nomenclature which clubs several goods and services under one category. For example, under cinema, we were taxing multiplex, single screen and even drama theatres the same way as entertainment... we changed the slabs, and will continue to do it as and when required”.
The review, he said, will be a constant exercise, as a responsive policy of the government.
