GST Bill is not a dancing instrument; 27% rate too high, says FM Arun Jaitley

Goods and Services Tax (GST) will reduce prices in the long run and boost economic growth, said Finance Minister Arun Jaitley in the Lok Sabha today.

GST Bill is not a dancing instrument which will go jumping from Standing Committee to Standing Committee, Arun Jaitley added, indicating the government was in no mood to agree to the Opposition’s demand for the same.

Centre and state governments are not interested in imposing higher goods and services tax (GST) rates that could hurt people, Arun Jaitley added.

The proposed GST would harmonise a mosaic of state and central levies into a national sales tax which business and policy makers hope would boost manufacturing and reduce corruption.

A government think-tank proposed the GST rate be set at 27 percent, well above the global average of 16.4 percent for similar taxes.

Jaitley said the proposed rate would be too high and needs to be “much more diluted”.

I don’t foresee any state losing revenue after roll out of GST, said Jaitley.

Cooperative federalism means strong states but does not mean a weak Centre, FM explained.

Revenue-neutral GST rate of 27 per cent suggested by a panel is too high; actual figure is going to be much diluted, revealed Jaitley.