New Delhi, Aug 3: Just as the income tax rate can’t be levied at the whim of the executive, and needs legislative approval, the same must also hold true for the Goods and Services Tax rate (GST), former Fince Minister P. Chidambaram said in the Rajya Sabha on Wednesday.
Batting for the GST rate to be incorporated in the relevant Constitution Amendment Bill itself — one of the main demands of his Congress party — Chidambaram also said an 18 per cent base rate for this pan-India levy was also the most appropriate.
“The empowered committee is the one which arrived at a 15.5 per cent revenue neutral rate and came to the conclusion that 18 per cent should be the appropriate GST rate. The Congress did not suggest the 18 per cent rate — 18 per cent came out of your report,” he said in the Rajya Sabha. His reference was to the committee currently chaired by West Bengal Fince Minister Amit Mitra.
“If we charge 24-26 per cent, it will defeat the very purpose of GST. Services represent 57 per cent of India’s GDP. It will be hugely inflatiory if we raise it. It’ll lead to tax evasion,” said the former Fince Minister during a debate on the GST bill.
“Today we may not put the rate in the Constitutiol amendment bill but we will have to put it in the central bill,” he said, wondering why such a step can’t be taken by Fince Minister Arun Jaitley while moving the amendments. (ians)