Milk and Mercedes can not be taxed at the same rate, says PM

NEW DELHI: The Prime Minister Narendra Modified Goods and Services (GST) more expensive.

"It would have been very simple, but it would have meant we could not have food at 0% tax rate. Can we have milk and Mercedes at the same rate? "Modi asked in an interview to 'Swarajya' magazine even as the NDA government marked July 1 as 'GST Day'. The ambitious tax reform measure was launched on July 1 last year.

"So, when our friends in Congress say that they will have just one GST rate, they are effectively saying they will be taxed at food and commodities, which are currently at zero or 5%, at 18%," Modi said.

The government is confident that the rate has stabilized and has not created large-scale disruptions as far as it is concerned. It is also important for the government of the world to fight against the ambitious tax measure.

Detailing benefits of GST, Modi said there was a big addition in the number of companies registered at 66 lakh. "In just one year after the introduction of GST, the number of new enterprises registered is 48 lakh. Around 350 crore invoices were processed and 11 crore returns were filed. Would we be looking at such numbers, if GST were indeed very complex, "he asked.

He said checkposts across the country have been abolished and there are no queues at state borders any more. "Not only are truck drivers saving precious time but the logistics sector is getting a boost and there-by increasing the productivity of our country. Would this be happening if GST was complex, "the PM said.

Asked whether GST was linked to his economic philosophy of minimum government, Modi said, "GST has been designed to end up inspecting raj with the help of information technology. From returns to refunds everything happens online. "

The PM said that GST was a massive change, requiring a complete reset of the world's largest economic systems. The reform merged 17 taxes and 23 cesses into one single tax. "When it was finally introduced, it was our endeavor to make it simple and ensure the sensitivity of the system. There are often such problems when they are reformed, but these issues are not only identified but also addressed in real time, "he said referring to a question on the subject of economists and businesses on the tax reform measure.

The PM said that GST was an evolving system and the government had calibrated it based on feedback from state governments, people, media and a lot of feedback from the people and traders had been incorporated.

"GST has seen Indian cooperative federalism at its best. We consolidated the states and developed a consensus, where earlier governments had failed, "Modi said.