Panelist: Hello and a warm welcome.
The Indian economy is just about recovering from demonetization and the one concern people across the country have is how ready are we for the GST ? It is supposed to be the one single biggest transformational act since independence possibly. Will it have a positive impact in the economy? How much disruption will it cause in the short term?
Joining us to discuss this at the GST Town Hall in Mumbai is Union Power Minister, Piyush Goyal, he’s is one of the key architects in helping the government put this GST mechanism in place. We are also joined by various players who are looking at the GST very-very carefully, representatives of different trade associations here in Mumbai. So, welcome to all of you. Minister, welcome to the GST Town Hall.
A: Thank You
Q: I want to begin by asking you Mr Goyal about how prepared you believe we are? Because, as I speak to people here, as I speak to people else, the one parallel that is drawn often is demonetization, now demonetization was a grenade flung suddenly and out of the blue. Here there is a certain amount of preparation, people know what to expect? Is it even correct to draw this parallel? How prepared are we?
A: Rahul, first of all, let me clarify, demonetization was neither a grenade nor thrown out of the blue. It was discussed in great detail between Reserve Bank of India and the government. It was found to be in the interests of the nation for curbing black money and corruption and as events since then have shown, the people of India have welcomed demonetization. They have borne a little bit of difficulty happily, trusting that this Prime Minister and this government mean good for India. As far as GST is concerned, this has been in the making for the last 14 years. Literally, 14 साल के वनवास के बाद आज इस देश को भगवान राम वापिस मिल रहे हैं |
The idea was first mooted when Mr Vajpayee was Prime Minister. Thereafter, the Congress government in 2007, in one of the budget speeches, proposed to find a solution to this new way of taxes. Around 2011, a law was introduced. Unfortunately, national consensus couldn’t be built around that law, largely, because the framework in which it was sought to be brought in, and the fact that the compensation to states for reducing the rate of CST – the Central Sales Tax, was not being paid in time, so states were hesitant to get involved in the GST story. After Prime Minister Modi took charge of the government; Prime Minister Modi engaged with all stakeholders, every state, their administration, trade associations, people of India. And, after three painstaking years of effort, and I promise you, probably, millions of man-hours have gone into make this happen. So, it’s not something which is not founded or deeply rooted in a lot of preparation.
The country is prepared, trade, business. The people of India are welcoming it across the country. It’s like swimming. Howsoever much one may prepare, end of the day, you have got to jump into the water to learn to swim. You can’t stand on the shore and learn all the movements and say now I am prepared to jump into the water and swim. Obviously, there will be certain issues, which will keep coming up. It’s a nation of a billion people, thousands of trades, millions of businessmen and traders and manufacturers, as things evolve things will get sorted.
Q: I have some examples of what happened when the GST was introduced in other country, far less complex than the Indian economy. In Canada, retailers put up placards saying, ‘don’t blame me for the GST.’ This is when there were huge cash registers….. whose vending machine melt down. In Malaysia, when GST was imposed in April 2015, there were reports that cash registers weren’t calibrated to deal with the new regime.
In South Korea, when this was introduced as a value added tax in 1977, it became a big game of hide and seek between tax officials implementing the new system and market vendors seeking to avoid taxation. I can go on. I am asking you, essentially, what is the government’s contingency in terms of dealing with some of these consequences because there will clearly be problems.
A: Well, two things here. First of all, you have once again demonstrated why you are one of my favourite journalists. You really come well prepared and, you know, I love engaging with people who research and come for the interview. But, more importantly, I think the difference between them and us are two.
One, for the first time in Independent India, we have a move which has universal acceptance across the political spectrum in the country. So, every political party, even if they are not in government in any one of the states, even if they lost every Lok Sabha Assembly election, but even if they may only have a presence in Rajya Sabha. So, in some sense, there has never been such a massive transformational reform in 70 years of Indian independence with unanimity across the country. So, I have yet to hear, people may have concern मेरा रेट कम है ज्यादा है network तैयार है नहीं है, वगैरा वगैरा, but there is yet to be one person who can stand up and oppose GST, because that’s the kind of universal consultation, absorbing everybody’s ideas that has gone into it.
The second big difference in Indian context is that the people of India trust that this is good for them. This is for the first time that people have understood and appreciated that what is being done is ultimately good for us, after all, why did people support demonetization in such a big way, irrespective of what certain journalists or certain opposition parties may have tried to whip up passions and try and make people oppose. Still, you found 90% of the country stand solidly behind Prime Minister Modi, because people trusted that this was good for their future, their children’s future, the nation’s future. That’s why India has far more resilience and the people of India are far more engaged in this whole process. So, glitches will come. I promise you, there will be glitches and maybe that will be the headline that you may show on your channel, but the reality is the people and the government will work together to overcome this.
Q: The idea behind GST is that there will be a one nation, one tax. One of the economic criticisms of GST has been that even though this is one nation, it is not one tax, given the various categories that have been introduced, people are wondering is this. because, for example, products like petroleum, alcohol that contribute about 40% of state revenue are outside the purview of the GST totally. So, who is this one nation, one tax?
A: Very good question and gives me an opportunity to set the context. If you recall when VAT was introduced, all the states didn’t come on board on day one. But, finally we decided to introduce it and once the benefits of that came on the table, all the other states even much faster than expected joined in the VAT framework when MODVAT was given for all the input taxes and you only paying tax on the value add. Similarly, it’s a new thing of massive dimensions and every decision is with 100% consensus. There has never been a dissent in the GST Council. That has been the depth leadership of Prime Minister Modi and Mr Jaitley. And, which is why I often say, this is a collective success of the entire country. It is not Mr Modi’s success, it’s not BJP’s success, it is Team India’s success, because everybody has unanimously agreed. Now, unanimity couldn’t be brought on petroleum and alcohol being brought in and electricity. Should we then keep arguing and fighting and not bring any good in the nation or should we say, ok, alcohol, petroleum are parked for the moment. Let’s bring in good for a larger part of the economy.
The 40% you say is, probably, in terms of value but if you see in terms of economic activity and transactions, they don’t constitute a very significant portion of the volume of transactions and the corruption scope there is much less. Black marketing scope is relatively to the extent you can put a, you know, pollute the petrol, corrupt the petrol with mixing of some kerosene and stuff like that. But, on a day to day basis, petroleum is imported, government imports sold by a bill. So you can’t have leakages in the system. Once the benefits become evident, my own suspicion is states will themselves put pressure that let’s bring petroleum, let’s bring alcohol but we need a national consensus on that.
The second question is even more interesting, and that actually to me shows the bankruptcy of some of the economists and some of the critics of GST in its present form. I used to oppose GST, because I was worried that there will be only one tax rate. In a nation like India, where there is still a large segment of people who are still making two ends meet. There is still a large middle class and a small section which is rich.
How can a BMW car be taxed at the same rate as a रबड़ की चप्पल ? How can a Mercedes car or a product which is a fancy 80 inch, 100 inch LED screen be taxed at the same rate as food stuff ? Specially, when a large part of the people of India, major portion of their family budget goes to buy food stuffs, very clearly, you need to differentiate between luxury goods, sin goods, essential goods and normal goods. And, plus the current system of taxation had many more rates, what we have tried to do is put them in the nearest bucket. So, there is a zero rate for food stuff and stuff like that, there is a 5% for essentials like solar panels, you want to promote renewable energy. It’s good for the world, good for India, good for the people of India and their health. There is a 12% rate for goods which merit some considerations need not be at the normal 18%. Then there is a normal 18%.
And, the advantage with having different rates is, we have been able to fit every item at the nearest slab so that the loss or gain is very nominal. People don’t feel a stress that zero has become 18 or zero has become 12.
Q: On the one side, you have got government Ministers, Secretaries, I spoke to Hasmukh Adhia, he said, don’t worry, prices are not going to go up. On the other hand, customers, and I will give you a personal example. I received a call from a builder who is supposed to deliver an apartment to me in October saying that if you pay before the 1st July, you will not have to pay 12.5% of tax, which you would have to if you pay after the 1st of July. Now, I researched, I read up, there are statements from Venkaiah Naidu, your colleague, there are statements from Hasmukh Adhia, from Arun Jaitley, which say that builders are getting input credit and, therefore, they don’t need to charge customers extra. However, on the ground, not just me, I may be slightly better researched than some other people but lots of customers are getting calls saying pay before the 1st July or you will be charged extra.
A: Which is the advantage of a Town Hall like the one you have organized today, and I am grateful to you for that. It gives us an opportunity to tell the consumers of India that anybody who does not pass on this input credit can actually be hauled up under the anti-profiteering provisions that we have provided in GST. So, I would appeal to you to please run a mission, run a campaign to educate customers that if anybody tries to pass on the GST on any consumer and does not give the benefit of input credit.
Q: No, but I spoke to the builder and I will give you his side of the story. He said that your apartment is virtually near completion, all the input that was to go into the construction of your tower has already been consumed so I will get no input credits. So, I will have to, on the day of completion, charge that 12.5% to you even though I get no input credit. He said, the government is confused, they don’t know what they are talking about. There is no option. You will have to pay tax, आपको तो देना ही पड़ेगा, आप देखलो अभी देना है कि बाद में देना है
A: There is a transitional period, in the transitional period we recognize that there will be certain issues, any game changing reform like GST will always have certain transitional issues. As they come along they can get resolved. For example, the issue, first it was decided that considering that there would have been an excise paid good that would already be there with certain retailers where he may not have, if he has proof of what tax is paid on his inputs, we have allowed him to take credit when he sells the goods. If there is a good on which he doesn’t have proof exactly how much excise is paid or tax is paid, we had introduced 40% of the sale value as an input credit. After representations from various trade associations, we have increased that now to 60%. So, if there is a product on which the excise papers are not available, with a trader for example, a shopkeeper, knowing and his product falls in the range of, let’s say 18%. So, on 9%, which is the central GST, he will be allowed a 60% input credit when he pays the tax.
So, we have thought through the transitional period. There may be specific instances on which when the issues come up, the GST Council can take a view on that. Bear in mind Rahul, this is not about what we in the government of India or Delhi or Finance Minister Jaitley decide, we have actually given up our powers on all of these decisions to the GST Council, which comprises 28 Chief Ministers and their Finance Ministers of each state, the 7 Union Territories, each one an independent person protecting the interests of his revenue and his state’s trade and business.
So, the beauty of this system is that consensus prevails and final decisions are taken by consensus, जिसको हिंदी में कहते है ना किसी की भी मनमानी नहीं चलेगी, अब संयुक्त निर्णय लेंगे, सब लोग मिल के देश हित में निर्णय लेंगे और समय के साथ निर्णय की प्रक्रिया और सरल होगी |
Q: As we speak to traders in Mumbai, in Delhi, small, medium size traders, their one concern is about having to file a lot of online forms and they are very-very concerned about it. And we will give you an example of a diagnostic centre, which currently files two service tax returns in a year. Starting September onwards, this service provider says he will have to file 3 returns very month.
A: What is his turnover, by the way?
Q: More than 5 lakhs I assume, obviously.
A: Not 5 lakhs, the minimum is 20 lakhs. And up to 75 lakhs, at least, for manufacturers and traders we have allowed a composition scheme. So, all those who are up to 20 lakhs have to do nothing, they don’t come under GST.
Q: But, can I just complete this? Three returns in a month, and 10th, 15th and the 20th all online, that’s 36 returns in a year. 12 TDS returns plus one annual returns, mathematically speaking, this person who is filing 2 service tax returns will have to file 49. They are concerned about this, how do you respond?
A: Absolutely, and that’s another misinformation that, sadly, is going around in the whole system. I would like to inform you and your viewers that actually, and I say this with authority, I am a Chartered Accountant. I say this with full responsibility. Actually, we have to file no return, the way the GSTN Network has been designed. I am a person who loves to or prides myself in thinking up good ideas but I promise you, to my mind, what has been designed in the GSTN Network is phenomenal. It’s far beyond what the best of people had imagined GSTN to be, and why do I say this, actually no return.
Everyone of us, your diagnostic centre friend included, must be maintaining a sales register. After all, an invoice register we all maintain in our accounts for our tax returns, service tax returns, income tax returns, labour returns. We all keep our sales register. But, we also keep sales register for service tax separately, often for income tax separately, often for sales tax or VAT separately, very often we also have to keep, rather not very often, all of us have to keep a purchase register separately which also we have to enter.
Then we have to compile all this data and make our return. We make a different return for service tax, make a different return for VAT, make a different return for entry tax in Navi Mumbai, for example, in lieu of Octroi, and we are all the time bogged down with paperwork. What has GSTN done for us? GSTN has created a robust story where all you need to do is enter your purchase invoices honestly and diligently. Moment you have entered your purchase invoices, your one return gets sorted out which is just an entry of your sales invoices, only your sales invoice. Your sales invoice becomes the purchase invoice of somebody else, and his purchase register or purchase return is automatically populated from my sales. Let me complete.
Once that purchase register gets populated, so, by the 10th I file my sales register, which is just a compilation of my sales invoices which we had to do in any case, everybody had to do whether monthly or quarterly or whatever. 10th to 15th, the person who gets this as his purchase register can verify and for which also we are creating a software, which will do the matching automatically. If anything is not entered he can call up the fellow from whom he had purchased कि तुमने sales invoice नहीं डाला है मेरे यहाँ पर आया नहीं है |
If he still doesn’t enter, he can enter his purchase invoice, it will pop up as a sale of the person who had not entered the sale invoice. So, really we are plugging all the loopholes and the leakages of the illegal transactions and the purchase register gets auto-populated. Nobody has to prepare a new purchase register now, that’s his second return. And the third is the matching of all your input credits and all your sales debits which you have to pay which the computer programme does automatically and drives out a figure which you have to pay as your tax.
So, effectively, and it may take a few weeks or few months for people to get used to writing the GSTN No. correctly, the name of the party correctly, enter all their sales invoice, some people who are too used to the informal economy will have to get used to the fact that अब कुछ छुप नहीं सकता |
Q: But, that’s the point I wanted to make. The reality of the Indian economy is most people don’t maintain these comprehensive registers that you as a chartered accountant speak about. A lot of the transactions, especially, pre-demonetization were all in cash, a lot of the traders told me…….
A: So, are you in any way holding a brief for illegal transactions?
Q: No, no, I think it’s a fantastic idea. But, then there are realistic concerns and these people, I am sure, come to you………….
A: So, anybody who doesn’t report his sales is not a genuine concern. He wants to cheat. He wants to evade taxes. So, would you Rahul Kanwal, sitting on the Aaj Tak or India Today platform wish that the government create avenues for people to cheat on taxes? Not at all. Thank you.
Q: Absolutely, so how much of the informal black economy which so far isn’t built, do you see getting added to the formal economy?
A: That is the reason I became a big fan of the GSTN Network as it has been created. It’s so nice, that really it leaves very little scope for anybody to be able to cheat on taxes now. For all these years, and I have been in business and industry for so many years before I became a Minister, I found the competition used to be so unfair that if two people cheated on taxes, the other 8 who paid their taxes honestly would have to suffer because the people who did not pay their tax were more competitive in price. The honest man had either to join them or lose his business.
Q: Is it at all possible to calculate how much of this informal black economy……
A: My sense is it will be near impossible. There is an infinity, you know, nobody can talk of 100%. It’s like that difference between less cash and cashless. But, to my mind, it will become near impossible because all data from all sources getting captured in one platform. So, even if, let’s say in the old days somebody was not paying his taxes honestly, he would not enter his sales invoice. But, somebody somewhere will enter a purchase invoice.
Q: But you saw what happened Minister with demonetization, people found, we carried a series of 10 exposes called the Jugaad mechanics, showing how different people were trying to short-circuit the system. The one thing that comes to mind immediately is given that you got a cap above the GST comes into place, people can say we are very small traders. We are so small that we don’t come under this….
A: Fair enough. So, nobody will get the credit on their goods. If they do not enter, pay their taxes nobody will get the credit on their goods. So, what will people do. After all, they want to show that purchase, right? Suppose, I am a large trader, you are a small trader. You don’t enter it and you are trying to hide even though you are above 75 lakhs and you sell your goods to me. Now, in my income tax, I have to show this as a purchase. Am I right? Assuming I am not getting credit, at least, in income tax I will have to show it as a purchase. So, I will enter your purchase invoice, I will pay tax on it and on a reverse charge I will get a credit for it. For me it’s a zero sum game. I pay the tax and get credit. But, in the process, I would have shown that I have purchased goods from you. Like that, whoever you sell to will all want to enjoy income tax returns and all, take that debit of the cost, and the computer system will then red flag – hey, here’s the name, Rahul Kanwal, his purchases by other people total to more than 75 lakhs. And you will not be…
Q: The fact is indeed the big promise that the GST has, there are lot of the Indian black informal economy will now come in under its purview. We take a quick break, we return to the GST Town Hall in Mumbai on the other side. Stay with us.
Welcome back, you are watching the India Today GST Town Hall. We are in Mumbai. We have got Piyush Goyal with us. And, we have got a whole bunch of representatives of different trader associations here in Mumbai and the Minister will now be taking some questions.
Q: Good afternoon sir, my name is Mohit Chaturvedi, I represent a Chartered accountancy firm, one of the oldest in India. What I wanted to ask was, GST has been built as one of the dream reforms of Narendra Modi ji. There is lot of myths around GST, needed some clarity, important one being, it will give rise to corruption and Inspector Raj. Can you clarify a little bit on the transparency aspect and bust that myth sir?
A: Mr Chaturvedi, the one myth that you need to be clarified and which you just mentioned is that it’s a dream project of Prime Minister Narendra Modi. We would have loved that if we could have done this on our own and taken the whole credit but the reality is not so. The reality is this is one credit and dream of every Indian. It is a dream which is being fulfilled by every political party working in consort, so you have even two communists governments supporting it full-fledged. You have governments who are very inimical to the BJP or NDA supporting it. So, really it would be very unfair on my part, though otherwise I would have loved to take this credit on my own. But the reality is it’s a combined effort of the entire political establishment because it effects and will give a better quality of life for 125 crore Indians. And, as regards transparency and corruption, on the contrary, this is going to eliminate corruption. It’s the best way to be transparent that if the whole country only enters their sales invoices, I am again repeating, there is no returns, no 37 returns, nothing. Enter your sales invoice, sleep peacefully at night.
Q: Myself Balmalkeet Singh, Chairman Core Committee, All India Motor Transport, which is the Apex body for the truckers. And we are very, road transport sector is very optimistic about the GST, because the reason is that today, our vehicle move around 280 kms per day due to the frequent check overs in the state check post. And we are hopeful that after GST, the state check post will be abolished, so our vehicle can be making around 480 to 500 km per day. So, Mantri ji has stated that they have the robust system GSTN so we also want to know that whether we have to carry the invoices which on the manual, whether there will be frequent check over, जैसे नाका बंदी करके बार बार जगह पर गाड़ी रोकी जाती है, उसे harass किया जाता है और state check post हैं जो भ्रष्ट्राचार के बड़े कारण हैं, और सरकार का उद्देश्य यह है कि भ्रष्ट्राचार बंद होना चाहिए?
Rahul: That’s a very good question Minister, because the doing away of the state check posts, the nakaas, who are supposed to be the one most visible manifestation of GST. All reports emerging now seem to suggest that because the e-way bill is not finalized, there is some lack of consensus. This won’t happen on the 1st of July, taking away one of the biggest visible advantages of the GST?
A: Well, because the GST Council is still deciding on the exact formats, the process will take some time. But, I just want to know that if we are looking at some change and a transformational change as this, suppose one aspect of that happens 10 days later, 15 days later, does it kill the whole process, kill the whole concept?
Q: So, you think the delay will only be 10-15 days or could be longer?
A: Let it be longer, यह तो 70 साल के delay के बाद देश में परिवर्तन आ रहा है, जिस देश ने 70 साल धीरज रखा और सब्र रखा तो थोड़े दिन और देख लेंगे | लेकिन, the good part then, I will also like to inform. I have run industry, excise invoice के बगैर तो कोई truck में माल जा ही नहीं सकता था पहले भी, तो आज भी अगर e-way bill साथ में जाये goods के तो अच्छा ही हैना नंबर 2 का धंधा पकड़ में आएगा, बंद होगा | अगर सब transporters हमारा सहयोग करें और खुद निर्णय करें हम बिना proper invoice के हम आगे जायेंगे ही नहीं और maybe, I am thinking aloud क्योंकि यह प्रश्न उठा है, I have not thought of it. समझो हम यह कर दें कि हर transporter को भी GSTN में ले लें तो जो sales invoice वह ट्रक में carry कर रहा है वह enter कर दे तो अगर कोई check post भी है तो it can be an electronic check post. From there, it will take the truck number and electronically………….
Q: But, the idea was to do away with those check posts?
A: There won’t be any check posts. It will be an electronic check post.
Q: हमारा यही मानना है कि यदि सारा कुछ online system में है, हमारा एक ही reservation है कि हमें रास्तों पर तंग नहीं किया जाये, 70 बरस से हो रहा है?
A: मैं शत-प्रतिशत आपके साथ मानता हूँ और यही उद्देश्य है GST का, इसके लिए GST Council ने e-way को अभी तक लागू नहीं किया है, इसको suspend किया हुआ है और चर्चा कर रहा है कि कैसा सिस्टम बनाया जाए जिससे check post भी न हो लेकिन भ्रष्ट्राचार और नंबर 2 का धंधा भी रोकने का साधन बन सके | So, they are still evolving a technological solution to the problem. Give it some more time.
Q: सर मेरी गाड़ी अगर 500 किलोमीटर करती है तो logistical cost भी कहीं न कहीं तो होगा?
A: Exactly, exactly, और आपका भ्रष्ट्राचार का मुसीबत भी ख़त्म होगा |
Q: I am Uttam Bagri, I am the Chairman of the Bombay Stock Exchange Brokers Forum. Stock Market is not just the prices also lots of businesses, there are lots of businesses which run, we are probably first to come under service tax. The law is fine. They will implement it, in fact, stock brokers and other …. have better systems compared to most of the businesses. But there are many questions that they keep on asking ourselves is that clarity नहीं है. For example, definition of agent, अब मेरा सबलोग का मेरा एजेंट है कि नहीं, these are the questions that we, एक consultant से पूछो कुछ और बोलता है, दूसरा कुछ और बोलता है, कुछ लोग बोलता है STT के ऊपर भी GST लगेगा?
A: तो आप consultant को क्यों पूछते हो, department को पूछो ना? हमारा इतना robust department है यहाँ पर, इतने अच्छे लोग हैं हमारे साथ यहाँ बैठे हुए हैं, महिंद्रा जी, आप इन लोगों को पूछिए आप इधर-उधर क्यों धक्के खा रहे हैं, association आपके सब सवाल उठाले और एक बार इनको invite करे, हमारे अधिकारियों ने आपकी जानकारी के लिए, हमारी मतलब केंद्र ने, राज्य और केंद्र के मिलके एक हफ्ते पहले तक 4,527 workshops की थी अलग अलग association के साथ देश भर में, chartered accountants ने 200 help desks शुरू किये हैं देश भर में जो मुफ्त में छोटे व्यापारियों को, manufacturers को मुफ्त में handhold कर रहे हैं registration करने में, handhold करेंगे पहले 2-3 महीने records रखने में, department ने मुफ्त में software दिया है कि आप उस software में offline सिर्फ sales invoice enter करो, internet की भी ज़रूरत नहीं है, महीने में एक बार एक call centre में जा के 10 minute में वह upload हो जायेगा, 3 minute में upload हो जायेगा |
Q: Does that software give you some…. The fact that it can supposedly take 3.5 billion transactions a month, it’s a software that hasn’t been tested with any serious load.
A: It has already been tested, the beta testing has been done, another round of testing we are planning to do in the next few days. But Rahul, वही बात हो गयी पानी में कूदोगे नहीं तो तैरना नहीं सीखोगे, आप बाहर बैठे हुए जितना भी simulations and butterfly stroke कर लो, फलाना ढिमका, पानी में कूदे बगैर आप swimming नहीं सीख सकते | तो एक बार इस देश को पहली जुलाई को GST को शुरू करना पड़ेगा उसमें जो जो विषय आयेंगे तो हम तो किधर भाग के तो नहीं जा रहे हैं, आपके state की machinery है | इसमें तो सबसे बड़ा advantage यह है कि दोनों centre और state सब मिलके काम कर रहे हैं तो आपके पास तो गाली गली में लोग होंगे जो आपको guide करने के लिए, और कुछ genuine चीज़ें आएँगी तो हम भी तो आपके ही है ना, आपने ही चुन के हमें भेजा है, राज्य सरकारों को भी आपने ही चुन के भेजा है | तो मिल बैठके राज्य सरकार, केंद्र सरकार, GST Council solutions भी निकालेंगे |
Q: My name is Manohar Vagley, I head the Maharashtra Sports and Fitness Trade Association. Now, what I am going to ask today sir is something which concerns everyone in this room because all of you have children, grandchildren who need to play. We are trying to encourage sports, we want people to come out and play sports. We welcome your GST sir, GST is good, it’s giving a level playing field, I appreciate all of that. But, can you please explain to me that when the Finance Minister had said that 28% will be levied on luxury goods and on sin goods. How some of our products have been pushed up? Athletics, which is an Olympic event; Gymnastics, Olympic event, we want people to go out and win medals?
A: Very good point. Bear in mind, first of all, Finance Minister alone cannot decide any move, it’s the GST Council all the Finance Minister have to unanimously agree. But the rule that the GST Council agreed on was that whatever is the existing rate on any product, sadly, if the existing rate of your product was close to 28% when you combine the excise duty, the sales tax, the VAT, the Octroi or entry duty and all of that. In case, the rate comes close to 28 then it will get into the 28 bracket, if it comes on 18 it will get into the 18 bracket. So we have tried that the benefit or the loss to any particular product or sector is the minimum, existing rates are maintained. And, over a period of time as revenue collection goes up…..
Rahul: Minister, we have had a very engaging session here, just looking at the level of engagement, the kind of questions it’s very clear we are going to jump into that pool. Now, let’s see how quickly we can learn how to swim.
Thank you so much for joining us at the India Today GST Town Hall in Mumbai.
June 26, 2017 Speaking at 'Badalta Maharashtra' by Loksatta, Mumbai