Former Union Finance Minister and senior Congress leader P Chidambaram has termed the Goods and Services Tax (GST) imperfect with major flaws. He said the Modi government had hurriedly pushing through the new tax sstem when the country was unprepared.
“This is a very imperfect tax measure that has been rushed through or pushed through against the wishes of large majority of small and medium business persons,” he told reporters in Karaikudi on Saturday. When it was very clear that the country was not ready and many glitches had to be removed, the BJP government, in anxiety, had pushed through the tax measure, ignoring legitimate criticisms, he said.
The Congress was the original proponent of the GST but “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 said.
Mr. Chidambaram alleged that too many compromises had been made adding to the imperfections in the GST. The major flaws were the multiple tax rates, the diarchy — both the Centre and the State governments exercising jurisdictions, keeping out petroleum products, electricity, alcohol and many aspects of real estate from the GST and the most obnoxious and draconian anti-profiteering provision, he said.
‘This bizarre provision must have been conceived by someone who does not understand economics or business or market economy,” he said. All these flaws should have been removed and people given time before rolling out the new tax measure.
“Nothing would have been lost if the government deferred the rollout by two to three months,” he said. The GST should have been tested in trial runs and the glitches removed. Without all this, the government had rushed through the tax regime.”
Reiterating the Congress’s support to the GST, Mr Chidambaram said “this imperfect GST, which is pushed through when the country is unprepared, is a grave mistake''. He hoped that the price of the mistake was not too high. He wanted the government to engage the Opposition and remove the mistakes.
When he announced the GST on February 28, 2006 and the Congress-led UPA government wanted to implement it by 2012 or 2013, the BJP declined to cooperate and, therefore, the GST was stalled. But after the BJP came to power, the Congress fully cooperated with the government, he noted.