Demand to reduce indirect taxes not practical: Arun Jaitley

New Delhi, Aug 8 The demand for reducing the indirect taxes and hiking direct taxes is not practical, Union Finance Minister Arun Jaitley said in the Lok Sabha on Monday.

"There is a demand that the rate of indirect taxes should be low as these are regressive taxes and that the direct taxes should be increased. In this regard, a comparison with other countries is not possible because the number of taxpayers in these countries is much higher," Jaitley said while replying to a debate on the Goods and Services Tax Bill in the lower house.

"A lot of people are exempt from paying income tax in India for economic and social reasons," he said.

The minister said corporate tax in India was kept "competitive" on purpose, in comparison with other countries.

"The corporate tax is low so that businesses have more money with them to invest back into the country. If we hike the corporate tax to, say 50 per cent, the corporates may choose to invest in countries where the tax rate is, say 20 per cent," he said.

Earlier, Jaitley hit out at the Congress, saying the 18 per cent cap on GST was suggested by the party when the bill was passed in the Lok Sabha and later tabled in the Rajya Sabha.

"The concept of a cap on GST was a subsequent development. The cap was not discussed in 2006 and in the successive years. Even when the Congress left (was voted out of power at the Centre) in 2014, nowhere was the cap suggestion made.

"The suggestion on the cap was adopted by the Congress after 2015, when the bill went to the Rajya Sabha," he said.

Leader of the Congress in the Lok Sabha Mallikarjun Kharge took a dig at Prime Minister Narendra Modi, saying he had opposed the bill as Gujarat Chief Minister by calling it "retrograde in nature".

"We were the creators of the GST. We were the first to bring the GST. We support it. Those who are passing the GST now, why were they opposing it when they were in the opposition?" asked Kharge.

"Had they agreed to our conditions on the GST earlier, the delay wouldn't have happened. We were never against the GST. We always wanted to pass it. It is wrong to say that we blocked the GST Bill," he added.

IANS