Picking holes in the present form of the Goods and Services Tax (GST), former Union Finance Minister P. Chidambaram said the new tax measure would lead to inflation and badly affect the micro, small and medium enterprises.
Talking to reporters here on Saturday, he said that though the Congress was the original proponent of the GST, its present form has many flaws and its repercussions would be known in the coming days.
The first repercussion would be inflation, he said. Citing a study, Mr. Chidambaram said that 80% of all goods and services would now come under tax, which would be higher than what it was before GST, which in turn would lead to inflation.
In the present form, GST was not a one-tax measure.The BJP government has introduced seven to eight rates of taxes after fixing the standard rate at 18% as against 15-15.5% recommended by the Chief Economic Adviser, Mr. Chidambaram said.
‘Exemptions not right’
Another major flaw was the exemption of petroleum products, electricity, alcohol products and some parts of real estate from GST, which meant that 35-40% of the economy was outside the net.
“This is not the GST designed by experts; this is not the GST advised by the Chief Economic Adviser; this is not the GST contemplated by the Congress; and this is not the GST the country deserves,” he hit out.
