Jaitley Says Almost Certain GST Rate Will Be Much Less Than 18 Per Cent

Finance Minister Arun Jaitley said on Wednesday it was almost certain that the proposed Goods and Services Tax (GST) rate would be much less than 18 per cent.

Jaitley said demand to scrap the 1 per cent levy under the GST Bill is fair and the issue is "resolvable".

GST is intended to create a single market and boost commerce in India's $2 trillion economy, but the bill, which was passed by the lower house of parliament, has been blocked in the upper house where Prime Minister Narendra Modi's nationalist coalition lacks a majority.

The opposition Congress party wants to cap the rate of GST at less than 20 percent, scrap a proposed state levy and create an independent mechanism to resolve disputes on revenue sharing between states.

Pitching for an early take-off of the Goods and Services Tax, IMF managing director Christine Lagarde on Wednesday said it will help India create more jobs, increase revenue as well as promote domestic manufacturing.

She assured support and technical assistance for implementation of the comprehensive indirect tax reform, which will subsume excise and sales taxes.

"The implementation of GST will help India create jobs and help in raising revenue to finance health, education etc," she said in a recorded video message at an interactive session of the industry with the Finance Minister on GST.

Terming GST as a trade agreement, she said, a harmonised and unified GST will broaden tax base.

Simple to administer will make GST an efficient taxation too, she added.

"IMF is ready to lend support and provide technical assistance for GST implementation," she said.

Speaking during the session, CII president Sumit Mazumder said in light of recent developments, the ongoing delay in implementation of GST is a matter of great concern.

If the Constitutional Amendment Bill is not passed in the current winter session, it will be a big disappointment for the industry and a roadblock in the development of the country, he said.

"CII has always maintained that GST would lead to 1.5-2 per cent increase in GDP growth. What better economic stimulus can there be?" he asked.

Ficci president Jyotsna Suri is opposed to the "politicisation" of GST, which is "in the interest of nation and imperative for the industry".

Terming the implementation of GST as a poverty alleviation measure, Onkar Kanwar, Chairman of Apollo Tyres, said: "The government is trying very hard to push the Constitutional Amendment Bill. I hope some good sense will prevail in Parliament."

Ford India president Nigel Harris said: "GST needs to happen now. It will give India a lot of credibility and ease of doing business. I don't think everyone is giving up (on GST). We are just re-emphasising this is the right thing to do."

(Agencies)