New Delhi sources added that Prime Minister Narendra Modi had ruled out a single tax rate under the GST, saying Mercedes car and milk cannot be taxed at the same rate adding that accepting Congress party' demand for a uniform 18% rate would lead to a spike in food and essential items' taxation. Meanwhile PM Modi said the Goods and Services Tax (GST) has within one year of its launch led to over 70% jump in indirect taxpayer base, demolished check-posts and merged 17 taxes and 23 cess into one single tax.
As per report the new tax regime, which subsumed central levies like excise duty and service tax and state taxes like VAT, is aimed at making indirect taxation "simple" while eliminating the 'Inspector Raj', he said, adding the GST is an evolving system which is calibrated based on feedback from state governments, trades and other stakeholders. Accordingly "It would have been very simple to have just one slab but it would have meant we could not have food items at 0% tax rate. Can we have milk and Mercedes at the same rate?”.
Furthermore he said in an interview to Swarajya Magazine "So, when
our friends in Congress say that they will have just one GST rate, they are
effectively saying they will tax food items and commodities, which are
currently at zero or 5%, at 18%". Moreover to a query on criticism of GST
implementation, he said the new tax regime was a massive change, requiring a
complete reset of one of the world's largest economic systems.
