Congress demand to put cap on GST rate in statute preposterous: Arun Jaitley


VOS: In signs of no thaw with Congress on goods and services tax (GST), finance minister Arun Jaitley on Wednesday described as preposterous the party’s demand for putting a cap on tax rate in the Constitution Bill, saying nowhere in the world tariffs are mentioned in the statute.

“Three new propositions are now raised (by Congress) including a preposterous one that tariff must be mentioned in Constitution of India. Now if they can tell me that anywhere else in the world this happens that tariffs are mentioned in Constitution.

“So every time there is a drought, flood and you need to increase the tax rate, you have to first go to all states in India to change the tax rate. This is something which is just not possible,” he said.

Jaitley said no tariff can ever be perpetual.

“When the volumes go up it will come down, in crisis it may go up. And therefore the concept of cap didn’t strike either of your two finance ministers when your government was in power.

“Now if you are wiser just because you are in opposition, the situation has changed. What you have proposed on the file (during P Chidambaram’s tenure) I am quite willing to accept that,” he said participating in a panel discussion organised by NDTV.

Jaitely, however, added that the GST is certainly going to come.

Congress leader Kamal Nath, who was in the audience, justified the party’s three demands for passage of GST Bill, saying the concept of GST would be defied if one per cent additional tax is imposed.

On cap on GST rate, he said the finance minister does at least say that there would be a cap on the rate but it should not be in the Constitution.

The third demand pertains to provision of a satisfactory dispute resolution mechanism.

“If we have a bill, we must have a good bill,” he said.

Andhra Pradesh chief minister N Chandrababu Naidu said the industry and the world are waiting for the GST and it should be passed at the earliest.

Jaitley said he had conveyed to Congress party and its leaders that he was willing to go back to manufacturing states on 1 per cent additional tax.
The revenue neutral rate suggested for GST is 16-16.5 per cent, he said.
“GST is certainly going to come. I have already conveyed to Congress leaders that I am willing to go to the states for the one per cent thing. I have privately conveyed that and I have no hesitation in admitting that publicly,” he said.
On dispute resolution also, Congress should check what P Chidambaram had proposed (as the then finance minister). If the Congress party has turned wiser now, then……” Jaitley said leaving the audience in a peel of laughter.

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