Letters: Back to square one?

With reference to the editorial, "A compromised GST" (October 20), it's intriguing to learn that the goods and services tax - believed to be the biggest tax reform since Independence that would create a national market for goods and services by subsuming excise duty, value-added tax/central service tax, octroi, entry tax - is poised for a regime of multiple, progressive tax rates that may defeat the purpose of the government trying to make it a prestige issue and the passage of the associated Constitution Amendment in Parliament.

GST, which aimed at providing moderate rates of tax with only a couple of tax slabs, is now destined to become a complicated and multi-faceted taxation regime like the one at present. Would the entire exercise not lose its significance and become meaningless if the government keeps compromising with the intended road map of GST?

The Centre has proposed four tax slabs ranging from zero to 26 per cent, defying the advice of expert committees to limit them to 18 to 20 per cent. This tax savvy government is deviating from the concept of having a flat rate, thus discomfiting end users. Are we not back to square one?

But the buck does not stop here; there is another proposal to levy a cess over and above the highest rate of 26 per cent, so as to collect Rs 50,000 crore as contingency to compensate states for any revenue loss.

This does not agree with me. The editorial observes that "no state is going to lose revenue at the proposed rates of tax" and this sum will probably add a percentage point to the overall tax rate.

However, it is unlikely that Finance Minister Arun Jaitley would listen to some sane voices urging him to be reasonable while taking a final decision on fixing GST rates across the country. He seems to be concerned only with rolling it out by April 1 next year as mandated by Prime Minister Narendra Modi.

Vinayak G, Bengaluru

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