Arbind Modi for one rate tax structure, says it is efficient
HYDERABAD: Arbind Modi, Chairman of the Finance Commission's Task Force on Goods and Service Tax (GST), has expressed himself against two-rate tax structure and granting exemptions on certain items.
Speaking at a symposium on ‘Goods and Service Tax -- issues and perspectives', organised by the Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI) here on Wednesday, he said the task force had recommended one rate tax structure as it was efficient and pro-compliance. “Exemptions and GST do not go together,” he said.
Mr. Modi said the task force had recommended exemptions only for food grains, health and education services.
Stating that the novelty of GST lay in the idea of harmonisation across Centre and States, he said that distortions could not be allowed in tax structure as India gets integrated with the world economy in the wake of globalisation.
Urging all stakeholders to participate directly in designing procedures and reforms, he said there was very little time as other countries which emerge from financial crisis would be eager to capture new markets.
“We will have to blame ourselves if we don't put our house in order,” he remarked.
Inaugurating the symposium, Principal Secretary (Revenue) Asutosh Mishra, said the whole concept of GST was still evolving and consensus was yet to be reached on several matters.
Mentioning the advantages of ushering in GST, he said there would be a fall in prices due to removal of cascading effect, while the tax base of both the Centre and State governments would be enlarged.
He sought the views of the trade body on whether the Central and State thresholds should be uniform or different as also on single versus two-rate tax structure.
FAPCCI president Harischandra Prasad, said though the State governments promised much at the beginning of VAT, subsequent compromises by them resulted only in growth of their revenues, eroding competitiveness of Indian industry and trade.