June 22, 2017

Speaking on ‘GST Rollout’ in New Delhi.

Since early morning we spent half an hour together, discussing various aspects of the new GST Regime which will be rolled out from the 1st of July. Very interesting questions and comments came out of this engagement, most issues were of technical nature which we could resolve across the table, we had representatives of the Ministry of Finance who joined us in the discussion, a couple of issues where we felt a little more consultation may be called for with the GST council have emerged, but all in all the broad picture out of this  engagement shows a) not a single participant in the room requested for deferment of July 1st rollout. Everybody, in fact many participants welcomed that we have decided to roll it from 1st July, the approach being that whether you do it 1st July, today, or September, or next year, there will be a transition period which we are all prepared to face, just like the people of India stood stoutly behind a good measure to eliminate corruption and black money, that was demonetisation, everybody unanimously believe that this is the big step forward, as they say ‘Great Step towards Transparency – GST’ and in that all the industry welcomed it. They are happy that the country is moving towards a regime which will almost eliminate the possibility of illegal transactions.

There are so many checks and balances in the wonderful program that is been prepared by the GSTian by which possibility of cheating or evading taxes is almost minimalised. That was largely welcomed by all the participants in the room today, they extended their felicitation to all the state chief ministers, finance ministers, who are members of GST council and also those parties which may not be in power in any of the states or centre, but also unanimously supported this, either in parliament or state legislatures. So it is truly the biggest reform that has ever happened in independent India and the biggest reform with 100% unanimity amongst the entire political establishment. So example of federal co-operative and collaborative federalism at its best, that was the sense that came out of the discussions. All the various sectors had certain technical issues, which were largely resolved across the table.

I believe at least those people who are looking for an honest tax regime are welcoming this wholeheartedly, there are a few elements in trade and industry who possibly have certain concerns because their old style of working will now have to change, and therefore, not at least in these four ministries, but may be outside, there may be some elements who may have some concerns, but we are happy to discuss with them to talk to anybody. The honorable Finance minister is happy to talk to them, some of our ministers have made ourselves available to any organisation which needs to discuss and seek any more clarity. The important thing is, that the regime has been made so simple, for tax payers up to 20 lakhs, no registration also not required, 20-75 lakhs manufactures composition scheme, only 2% GST, trades only 1% GST, so all the small traders and manufactures have been given so much relief that compared to the past this is far better. For all the others beyond 75 lakhs, earlier they have to file return in every department, there was assessment done by every department separately, there was sometimes harassment and terrorism of authorities, discretion was available in different ways, all of that have been eliminated, and the good part is that now assesses have to only enter their sales invoice, once they enter their sales invoice, after that we have to do nothing, the rest of the data is auto populated. Your GST and return are auto populated.

So this is the complete misinformation campaign that people have to file 37 returns, 3 return every month, this is complete nonsense. And, misinformation spread by some vested elements who don’t want to come under the honest tax regime. The reality is that earlier, and I have been a businessman myself, a consultant myself, an investment banker myself, and before that I have run industry myself. We used to harassed by income tax separately, by sales tax separately, which is now VAT, by excise, by customs. Under the new regime, all of that be a history. I only have to make one sales register, honestly. After that the purchase registers will be auto populated and generated, return is simplified, tax rates are simplified under the HSN code, so my mind what has been prepared is an outstanding GSTian system which will hold this country in good state, any transition or any transformation of such a big nature takes a little time to mature. There will be certain teething troubles, for which I’m sure the honest people of India who stand to benefit from this, the honest traders and small scale manufacturers and businessmen of India, who stand to hugely benefit from this, stand with the central government and the state governments and all the people who have supported GST and its introduction wholeheartedly. Thank you very much.


Q. (Not audible)
Ans: I was wondering who will ask the first question which I expected to be this. There are 2 main issues on which I believe some more clarity will help. One is on the utilisation of fly ash, because it is an environmentally-friendly product and we want to encourage the utilisation of fly ash, I have requested that in the next GST council, whenever it takes place, once we flag on this issue, but I’m not in favour of a separate classification, because after that people will start misusing They will use 5-10% fly ash and call every product coming out of fly ash. So it will have to be carefully considered, but there cannot be one size fits all formula for fly ash. In the cable industry, in a certain sector it has been kept at 28%, we may request the GST and council to try and relook that one particular industry because it has 2 regimes, 18% and 28%, and may unnecessarily result in discrimination between the participants of the same sector.

Having said that, in both these sectors, the people have agreed that from 1st July they will start paying taxes at the current rate, that will also give us data whether really from the past this tax rate has become inordinately high. So with that, armed with that data of 3 or 6 months it will become easier to access whether any particular industry there is been a unfair increase in tax rates. We can easily check from the data of the tax collected prior to 1st July and the tax collected post 1st July. So I have asked all industry participants to honestly pay their taxes. If there are people who are cheating their taxes to become whistleblowers to inform the department, because those who are cheating taxes are actually harming the honest tax payers, and they are also harming the Indian economy, after all the money that is generated from GST will be used by the centre and the states to serve the poor of India. Ye bhi gareeb kalyan ka ek measure hai. Ye bhi ek tareeka hai jisse imandaar vyakti apna tax bharenge, jo sakarein imandaari se janta ki sewa me laga sake. To mujhe lagta hai ye 2 main issues the, solar pe 1 chota sa issue tha, contract vs solar panels alone, vo lagbhag humne resolve kar diya hai aaj. Me alag se byte nhi dunga, jo pochna hai yahi pooch lo.


Q. (Not audible)
Ans: Mujhe isme koi power tariff badne ka aasar nhi dikhta hai. Koi kidher 1-2 paise jada ho, kidher 1-2 paise kam ho utna hi farak padega.  

Q. (Not audible)
Ans: They have written to the state government and I have also received a representation from the state government, but this is really a matter, as procurers, between the states and the companies to sought out, but as a responsible part government in the country central government is willing to play the role of facilitator to bring all the stakeholders on the table so that an informed, considered view can be taken in the best interest of the common man, in the best interest of the people of India.

Q. (Not audible)
Ans: No, they can seek the intervention of everybody but it is ultimately a matter between the procurers and the suppliers, but we are not sitting with blinkers or eyes closed or blind-folded, we are also conscious of the issues and we will have to ultimately protect the interest of the common consumer so that the power tariffs through an indirect route don’t increase for the common man or the DISCOMs.

Q. (Not audible)
Ans: Wo case to case differ karega or jaha jaha uska benefit ho sakta hai vo appropriate regulatory commission uska benefit pass on karegi. Jaise kabhi koi cheez badti hai to change in law k tehet policy me pravdhan hai ki uska impact mitigate kiya jayega, vaise hi jab koi cheez ghat ti hai to vo bhi appropriate commission, or mein kal forum of regulators se iske vishay me charcha karne wala hu.

Q. (Not audible)
Ans: There is no question of my comfort or discomfort. I have no role in that.

Q. (Not audible)
Ans: We have facilitated a discussion amongst all the stakeholders, only to bring all the issues on the table, just like I had facilitated a discussion in Teesta in Sikkim, and many of you who have been covering it are aware that thanks to just our facilitation, me sitting in the room and getting them to talk to each other, we were able to solve an issue where 9,000 crores were invested, 90% complete project, but was stalled, we were able to get them on the table, talk to each other, find a solution in the interest of India and the people of the north-east and you are all aware that 12,000 MW power is being generated from Teesta, since March, which is going to serve the people of north-east with the availability of cheaper local power. So I think, our approach in this matter is one of ultimately what will help the common man, the poor man get low cost affordable power. Thank You.



Next Speech

June 21, 2017 Speaking at GST Townhall, Vishakhapatnam

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