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Amarinder urges Modi to review GST rates for simplification

Press Trust of India  |  Chandigarh 

Chief Minister has written to Modi, seeking a

review of GST rates for simplification and ensure that the tax regime is set right to mitigate difficulties faced by traders.

In the demi-official letter, Singh urged for quick redressal of some of the "key irritants" in the GST regime.

He said that the GST was a reform in which political parties had come together for the national good. Despite reservations, the states have supported all initiatives for reform and simplification of the archaic tax system, he wrote.

"Somehow, the experience of the last one year has been more bitter than sweet," Singh wrote, according to an official statement issued in Chandigarh today.

"Many global experts feel that single rate has far greater advantages and the poor should be compensated through direct benefit transfers so that the rich are not benefitted from these concessions," he said.

After the GST was rolled out on July 1, 2017, Singh had praised the tax regime saying it will benefit debt-ridden states like but had voiced reservations on its implementation.

The leader's stance then was in contrast to his party, which boycotted the midnight session of Parliament when the GST implementation was announced.

In November last year, Singh had written to then seeking immediate withdrawal of 5 per cent GST on stuff in containers intended for free distribution to economically weaker sections of the society.

In his letter to now, Singh cited examples from day-to-day life for goods that had little to distinguish from each other.

"While there was no GST on milk, cream, butter milk, curd or lassi and bread; GST had been levied at 5 per cent on sweetening and UHT (ultra-high temperature) milk, milk remains after the formation of curds, chhena or paneer in unit container, cashew nuts, walnuts, raisins and chestnuts, mango dried and sliced and pizza bread.

"Similarly, 12 per cent GST was being charged on condensed milk, cheese, almonds, pistachios, nuts and dates, figs dried and preserved, while 18 per cent GST was levied on ready to eat packaged food, milk containing edible nuts with sugar or other ingredients and garlic bread," he said.

He said there was a strong rationale to review tax rates for simplification, which will also curb evasion and leakages.

He expressed concern that GST revenues had not shown the kind of buoyancy that was expected, and said the revenue for June 2018 - about one year after the GST came into force -remains nearly the same as in the first month (Rs 95,160 crore vs 93,590 crore).

Adjusted for nominal increase in GDP (at current prices) of even 10 per cent the effective revenue was actually much lower over the last year, he said.

Singh wrote in the letter that the full potential of the GST would only be realised when the energy sector, comprising petroleum and electricity, were included in the tax regime.

"...We should ensure that the proposed new return should be an example of simplification for rest of the world rather than a puzzle like before," he said.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sun, July 08 2018. 20:40 IST