Chidambaram says GST will be inflationary initially

Chidambaram has been very vocal about GST and he has said that GST should be rolled out from October 1 and not July 1 as proposed by finance minister Arun Jaitley.

New Delhi, April 11: Former finance minister P Chidambaram on Tuesday said, "GST will bring efficiency in tax collection and bring in potential tax payers; restrict scope for tax evasion and will boost GDP."

He also added that, "In immediate future GST will be inflationary; whether it will be mild or high depends on ultimate rates which the government announces."

Chidambaram has been very vocal about GST and he has said that GST should be rolled out from October 1 and not July 1 as proposed by finance minister Arun Jaitley. He is of the opinion that big companies will be able to hire talent to start implementing GST but businesses in smaller town will only have local accountant to handle GST and it will be very difficult for them at such a short notice.

He also suggested that union government should persuade states to include electricity, real estate and petroleum products in GST.

Chidambaram has also been against GST having multiple rate as it defeats the very idea of having a unified tax rule. He said the bill is imperfect and to make it less imperfect he said government should be able to push 90 percent of the goods and services in the modal rate of 18 percent.

GST is to have five different tax rates starting with zero percent, five percent, 12 percent, 18 percent and 28 percent. Also GST proposes additional cess on tobacco products and luxury goods. Thus as per him one nation one tax rate will be a myth if GST is implemented in its present proposed form.

OneIndia News