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Actual GST rate likely to be below 18%, says Jaitley

business Updated: Dec 17, 2015 00:07 IST
HT Correspondent
HT Correspondent
Hindustan Times
GST bill

Finance Minister Arun Jaitley and Chief Economic Advisor Arvind Subramaniam with President, FICCI Jyotsna Suri, President PHDCCI, Mahesh Gupta and President CII, Sumit Mazumder during a session on "GST in India" jointly organised by CII, FICCI and ASSOCHAM in New Delhi.(PTI Photo)

Accusing the opposition Congress of setting a wrong precedent by stalling Parliament, finance minister Arun Jaitley said on Wednesday that “legislative activity” was becoming more and more difficult, and the government may have to resort to executive action or money bills for taking policy decisions in the future.

“I do realise that executive actions and money bills are more easily implementable than routine legislation,” Jaitley said, while addressing a session on the goods and services tax organised by industry bodies.

“If by these tactics, you become outlaws as far as parliamentary democracies are concerned, then you will make the decision-making process, particularly in relation to legislation, extremely difficult and governments in the future will have to realise that decision-making has to take place through executive action and money bills,” Jaitley said.

The GST Bill is pending Rajya Sabha approval. The Congress has been blocking the passage of the bill by setting conditions, Jaitley said the issue was “resolvable” provided the opposition had the intent to do so. “The attitude is India did not grow when we were in power so we will not let India grow now,” he said.

The finance minister said the standard tax rate would be below 18% under the proposed GST. Ruling out specifying the GST rate in the Constitution Amendment Bill, he said the rate for commodities used by the poorer sections would be lower than the standard rate, while luxury and “sin” products would attract an even higher tax.

The Congress has been demanding a cap of 18% on the maximum GST rate.

He also indicated that the opposition’s demand to scrap 1% additional levy on inter-state sales may be accepted.

By implementing GST, India could better its GDP growth by 1-2%, Jaitley said, adding that while the world was slowing India was registering a respectable growth despite weak monsoon for two years and shrinking exports market.

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