[ad_1]
Just before the first anniversary of the Goods and Services Tax (GST), union finance minister Piyush Goyal spoke to R Sukumar and Shishir Gupta from the Hindustan Times what he called a "game-changing reform". Published Extracts:
What are your great lessons from a GST year?
There is no comparable example in the world where a country the size of India has embarked on implementing the GST in 29 states, seven territories of the Union; different political parties with different ideologies that run different states. In this sense, it was a very daring move and after a year, I feel satisfied that the effort has borne fruit.
The original idea was in the 2000s when the NDA (National Democratic Alliance) government under Atal Bihari Vajpayee suggested it, but it was not accepted by all states and parties policies (over the next decade). States lacked confidence in the intentions of the central government. One of the reasons for this, which I've often talked about, is that the Central Sales Tax, CST compensation, that the congressional government had promised to give the states had not been given. Prime Minister (Narendra) Modi and (at the time) Finance Minister Arun Jaitley delivered there systematically. They have gained the trust of the states, paid all the compensation from previous years, adopted a consensus approach – all decisions related to legal policies, procedural frameworks, rates are unanimous and everyone's concerns have been taken into account .
Throughout the year, we have been agile. Whenever decisions need to be made to simplify, correct anomalies, give relief to certain areas of activity and trade, we have taken them. We have reduced rates on about 400 items; Many items were made tax free. This is a demonstration of the federal structure of India at its best. It's a demonstration that we can make bold and powerful reform decisions in this country. This is a demonstration that Prime Minister Modi is trustworthy even by opposition party governments.
The collections that have been done up to here really give us the satisfaction of a move towards the formalization of the economy; there has been a shift towards a greater degree of simplification. Instead of 40 administered laws and different inspectors coming in for sales tax, excise, service tax, grant, entry tax and so many others … 17 taxes and 23 credits were subsumed in one tax. In my opinion, it is a game-changing reform, the benefits of which will be felt for decades and decades.
The chief economic advisor recently said that the 28% slab should disappear. What do you think about this?
First, the original idea of the GST rates was to fix them in the slice closest to the existing rates before the GST. Because we had to make sure that there was no loss of income. In addition, we had committed a 14% increase in the CAGR (Compound Annual Growth Rate) in (state) revenues. And if there was a shortfall, the center should have repaired.
In the first case, we kept the rates closest to the initial rates. Obviously, we needed different slabs because there are goods that only the rich consume – where you need a high rate. There are goods that the poor consume, where you want to keep them very low and in many cases zero.
Having implemented successfully – as I said we have already reduced tariffs on about 400 items; many items in the slab of 28% saw their prices go down; about 50 items I think – there are some items in the slab of 28%. The GST is an evolving tax and we are sensitive to market demands, subject to how the collections evolve.
In the long run, everyone wants rates to go down. This government is the one who believes that as much as we can, we should give relief to the people of India.
There was also talk of reducing the number of slabs …
I think these are all decisions we can not make while sitting in Delhi. These are decisions that must be made by the GST Board.
There were several problems and problems of implementation. You have simplified some of these procedures. At the present time there is much concern about the annual reports …
Or the corresponding bill.
For the moment. But we are finding that the electronic channels bill is a great success and that we are convinced that more and more businesses are becoming official. We are confident that we are in the right direction. In the future, there will be an even further simplification of this process
The cancellation of the imputation, the concordance of the invoices, will it be done in good time?
We have a committee that is also examining the reverse charge mechanism. formalization of the economy. Something like the GST formalizes the economy in a forced way. This benefits the economy and the country in the long run, but is not it politically risky in the short term?
Previously, (with) all indirect taxes collected, we had 6.37 million badessments. Today we have 11 million. In the short term, this may seem painful for some who now have to enter the formal network. I've had the opportunity to meet businessmen from various industries – textiles, plastic items, utensils, steel – and from one end of the country to the other. My own judgment is that young businessmen, the children of businessmen, are very happy and excited by this formalization.
They want to do their business honestly, they want to party and sleep peacefully. They do not want to have two account books and are worried and insist all the time on how to hide certain transactions. The next generation is excited to be part of it. It takes a little while for business people to understand that it is good for them, but gradually this process is evolving.
Recently, a survey revealed that 77% of businesses say that the GST has had a positive impact. on business. Revenue collections confirm that formalization helps collections. The latest available figure is in April, around Rs 94,000 crore, but over the past five years, 7.1% of annual indirect taxes are collected in April. If you extrapolate to an annual figure, we will far exceed our revenue target (in 2018-19). In my opinion, as we get the chance, we will reduce rates further. If we have to proceed with a calibration or a simplification in the process, we will do it.
So, would you say, would you say, your approach will consist of fewer slabs and lower rates?
I do not have it yet If I think simplification is necessary, does it make sense to have so many slabs? [19659099] You must understand different products have a different end market. India is not a country where everyone has a high standard of living, so we can have an average tax rate for everything, as suggested by the leaders of the United States. ;opposition. Leaders of the same parties are talking about another voice on the GST board. It is unfortunate that we are trying to politicize a success story here. Collectively, all parties worked together for this success. A product that is going to be used by millionaires and billionaires should have a high tax rate and a product that is going to be used by the poor should have a low tax rate. I think it's the worst form of bourgeois capitalism when people suggest that there should be a rate. We will continue to have different rates. We will continue to tax the rich. And we will make sure that the poor and the middle clbad of this country are relieved …
The question was not about a single tax rate, but perhaps less than what you currently have. You now have at least five years. Three would make business easier, is not it?
This is a tax that is barely a year old and includes 40 taxes. We must continually monitor what is happening and progress in the collections. On this basis, it will evolve according to the best way to administer it for the benefit of the Indian people
The GST Council is one of the best examples of cooperative federalism …
Absolutely.
Were you working with the states?
Excellent. The good part is that in the Council, all parties worked in teams, raised themselves above political considerations, or a shortsighted view. I must acknowledge the contribution of all the ministers of finance of the state and governments. It is a collective effort.
The Center also waived its right to set rates and rates of taxation. We also put in the pool – maybe a lot more than anyone. But it has been in the spirit of cooperation. This has been in the spirit of equality. Everyone had an equal voice and told the Council. And no great fraternal approach has been taken. In the GST Board, we generally uphold the best interests of the nation and strive for consistency of purpose. Outside, that politics take care of itself
Oil, real estate, alcohol, what is the reflection on these?
I think that with an open mind, all these issues will be examined by the Council.
It's up to the Council to decide
But these are things you are open to?
The good part of Prime Minister Modi and his thinking is that we have never closed the door to debate, discussion, and ideation. We like to look at new innovative ideas on an ongoing basis. At the Council we will be open to all suggestions.
Moving away from the GST, I have to ask you about the rupee. And the oil. Are you worried?
The United States has sanctions against Iran. The United States is putting pressure on countries that buy oil from Iran. OPEC (Organization of Petroleum Exporting Countries) has reduced production. And the global economy is recovering, so demand is increasing. It's elementary (why crude prices are rising). As for the rupee, in 2013, the rupee hit 68-69 (per dollar). Raghuram Rajan, then Governor of RBI (Reserve Bank of India), tempered the situation by introducing accounts of the FCNR (B), thanks to which the banks were able to raise 32 billion dollars. This reduced the rupee.
In the Modi government, we increased foreign exchange reserves from $ 303 billion to $ 425 billion, but we also repaid $ 32 billion. This has been the strength of the Indian economy and the improvement of the macroeconomy that the world has recognized. Currently, there is a situation where the United States has raised rates, there is a flow of money, or rather the fear that people will have that money coming back to the United States. There is an international geopolitical situation with a bustling trade war. Oil prices have risen over the last three months.
All this provoked a temporary situation (on the foreign exchange market). I'm sure RBI is at the top of things. This phenomenon is something we look at. But indeed, in our regime, there was no depreciation. But this kind of volatility needs to be monitored and in an organized market, we can only have one organized response. We can not have a reflex.
Source link
