Cong pushed 31 pc tax legacy, must introspect on GST: Jaitley

(UNI) Union Finance Minister Arun Jaitley on Monday lashed out at the Congress for its continuous attack on the government over the Goods and Services Tax (GST) and said those who oppressed India with a 31 per cent indirect tax and “consistently belittled the GST, must seriously introspect”.

“Irresponsible politics and irresponsible economics is only a race to the bottom,” Mr Jaitley wrote in a blog piece, posted on Facebook.

Seeking to answer some of the questions on GST raised from time to time, prior to the GST regime, the Minister tweeted, “India had the worst indirect tax system anywhere in the world”.

“Both the Centre and the state government were entitled to levy a set of taxes. There were 17 taxes levied. An entrepreneur, therefore, faced 17 inspectors, 17 returns and 17 assessments. The rate of taxation were exorbitantly high,” he wrote.

He further said that on this backdrop, the assessees had only two options – either to pay a high rate of tax or evade it.

“Tax evasion was prevalent to a large extent. India comprised of multiple markets. Each state was a separate market because the rate of tax could be different. Interstate sales became inherently inefficient because trucks had to wait for hours and days at the state borders,” he said.

However, he said once the uniform taxation mechanism was introduced by the Modi government in 2017, the GST “changed the situation radically”.

“All 17 taxes were combined into one. The whole of India became one market. The interstate barriers disappeared. Entry into the cities became open, with abolition of the entry tax,” he said.

Mr Jaitley said a frequently made comment on the GST has been that the revenue position has been disappointing.

“The comment is based on an inadequate understanding of both the targets and the revenue increase. The targets set for the state in the GST regime are unprecedently high. Even though the GST commenced on July 1, 2017, the base year for revenue increase has been calculated as 2015-16”.

For each year, he wrote a 14 per cent increase is guaranteed.