Jaitley signals further GST rate cuts, hits out against politicizing tax reform


New Delhi: Finance minister Arun Jaitley on Monday signalled more GST rate cuts and appealed to businesses to pass on the benefit of the recent reductions to consumers.

“The tax rate rationalisation process will always continue. Already, you have a situation today where every tax payer can say that he has a bigger market and more reasonable tax rates,” said Jaitley.

The finance minister, however, qualified that the rate cuts will be presaged on revenue collections and then went on to point out that the tax burden on most items at present is less than what it used to be.

In an interaction with the media, Jaitley dismissed political charges that the GST rate rationalisation announced by the GST Council last Friday was designed to influence assembly elections in Gujarat. He defended the four-rate GST structure saying in a country like India, basic food items and luxury and sin goods cannot be taxed at the same rate.

The minister urged the industry to pass on benefit of the tax rate cuts to consumers. “This will also help bring down inflation,” he said.

Jaitley, who chairs the GST Council which also consists of members from states and union territories with legislature, clarified that the relief measures and GST rate cuts that the Council announced at its 23rd meeting in Guwahati last week were part of an ongoing rationalisation exercise based on an approach paper that guides tax rate revisions in the GST era.

The GST Council’s decisions appeared to acquire a political hue as parties sought to link the constitutional body’s policy response to tax payers’ difficulties in the new regime with the ongoing assembly poll in Gujarat, where the main opposition party Congress and the ruling BJP are locked in a fight.

Rahul Gandhi said the Congress would continue to fight for an 18% cap on the highest GST slab instead of the current 28%, and vowed that the party would get the job done “if the ruling BJP doesn’t”, Mint reported on Saturday.



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