Indians Have to Adjust With New Culture of Paying Tax Say Arun Jaitley


As the India’s biggest tax reform since independence – Goods, and Service Tax (GST), came tonight into execution after 17 confused years of debate, here’s what Arun Jaitley said about this historic bill.

Are you nervous about the GST Bill?

The Finance Minister of India looked very relaxed about the about the bill and said that he doesn’t think like that. He said that the officers and ministers have worked their best and with a perfect sense of responsibility. Jaitley added that they have added all the systems in the right place and the rollout must be quite smooth. The finance minister said that some malfunctions are going to occur, but there are sure that they will right away repair it. At the end, Jaitley said that there will be some transition issues that commonly happen when you change over from one system to another one.

Does this hurt you that some of the parties that were part of the decision-making process in the GST Council are now putting questions?

The finance minister said that luckily for them, there was not any politics in the council. He said that the politics existed only outside the council. Jaitley also said that one prepared to experience with that kind of politics in a democracy. He concluded his answer with the fact that all the decisions have been taken by agreement and goes through a long discussion procedure, where all worked collectively.

What about West Bengal as they are saying again and again that they’re not ready for a replacement?

Responding to this question, the finance minister said that we don’t have a lot of time, and July 1 is a good sufficient time to go with. Jaitley also said that it’s not his sole decision as it is the decision of 31 finance ministers from the various states and of him. Highlighting the importance of GST Bill, Jaitley said that the constitution needs us to commence GST by September 16, or else there will be absolute chaos as the government will not be able to collect taxes.

What do you say about the main opposition (Congress) making an issue of its midnight launch?

Interestingly, the finance minister said that that it’s too unimportant an issue to boycott a function by stating a control to the timing. Jaitley added that Congress can’t claim a monopoly to a specific timing that any hour of the day or the evening only belongs to them.

What’s your take on the ongoing rumors of probable shortages and other issues?

The finance minister clearly said that he doesn’t believe that GST will impact supply at all.

Talking about the opposition from some political parties, do you think that it is going to create issues in some states?

Jaitley said no, I don’t think so. He said that all the state governments acted with a great sense of responsibility and he’s sure that they will continue to do so in future as well.

When do you imagine Jammu and Kashmir to join GST and is anything being done to get the National Conference on board?

The finance minister said that when in power, the National Conference was very much a part of the GST structure. Jaitley added that Abdul Rahim Rather was the chairman and he’s hoping that they will take look out at a larger picture. He also added that he talked with Omar Abdullah and requested him to support GST. Jaitley said or else, the consumers in the state will have to pay tax twice and it will be a disadvantage for the manufacturers in the state. On the other hand, Jaitley concluded the answer by saying that he’s confident that Jammu and Kashmir will join soon.

You met the industry on Thursday. What you said to them when you met them and what was their feedback?

The finance minister said that we were taking the feedback from the consumer goods industry on the fact that what kind of impact it will have on prices. He said that many of them said that if there would be an insignificant increase somewhere, they will take up and if it will be a large decrease, they will pass it on.

What’s your take on the traders complaining of early problems?

Jaitley added that a few of the arguments are real and many are just being actually made up. The finance minister assured that if there will be genuine cases, we will address them. And if they are just made up, then they have to adjust themselves to the new culture of paying taxes. He added that we need a tax-compliant country. The finance minister also reassured the small traders and businessmen are out and the compliance burden on those with a yearly turnover of Rs 20 lakh to Rs 75 lakh is lower through the composition scheme. Jaitley added that to help change to the new system, we have given transition time.

What do you say about those who are saying that the Indian GST is not the real GST?

Jaitley smartly answered and that people who have no other criticism to do, they play with words.

However, there are numerous slabs, which are seen as a difficulty as in some other countries like Europe, have just one rate.

Jaitley said that Europe doesn’t experience like our country. He said in a country like India, where there are a lot of poor people, you can’t have the equal tax on Hawai chappals and Mercedes cars. The finance minister added that if we had opted a single rate, something facing zero or 3-4% tax would have gone up, and there are many items that are consumed by the poor.

Is this means fewer slabs?

Jaitely said ultimately, the two standard rates could unite into one. He said that a higher base will make a space to generate rates more than reasonable and sometime in the future, then 12% and 18% slabs could converge. Jaitley said that if the base increases, the rates can be carried down.

And what’s your view on real estate and petroleum products?

The finance minister said that oil is a part of the Constitutional amendment and it’s currently zero-rated. He added that when there is consensus on the GST council, we will add it. Talking about real estate, he said that it also needs to be carried in to check tax evasion.