The senior Congress leader, while slamming the Goods and Services Tax (GST), said it is a “very different animal and not a true GST”.
“GST means one tax rate only. If (it has) multiple rates, call it ‘RSS tax’… It is an undeniable fact that GST has not yet had a positive impact on economic growth,” Chidambaram told reporters at the party’s office here.
“The design, structure, infrastructure backbone, rate or rates and implementation of the GST were so flawed that GST has become a bad word among business persons, traders, exporters and the common citizens,” he said.
The only section that appears to be happy about the GST is the tax administration that has acquired “extraordinary powers that frighten” the average business person and the common citizen, he said.
“It is widely perceived that GST has increased the tax burden of the common citizen. It has certainly not reduced the tax burden as was promised,” he said.
Every step taken by the BJP government, starting from the GST Constitution Amendment Bill, with regard to the tax was deeply flawed, he alleged.
Chidambaram claimed that the government even ignored the advice of the chief economic adviser on many aspects of the GST, notably on the rates.
Underlining that the Congress was the original proponent of the GST and it was first proposed by the UPA in 2006, the four-time finance minister said experts should be given a free hand in overhauling the indirect tax structure.
“Mr Fixits have been at work in reforming the GST. As the original proponent of the GST, the Congress party hopes that the task of thoroughly overhauling the GST will be entrusted to experts,” he said.
He also gave a number of suggestions for better implementation of the indirect tax regime, including bringing petroleum products under its ambit.
The tax rates should be gradually reduced to a single rate with exemption for truly “merit goods and services” (that add to the welfare of the society), he said, adding that a single rate must not exceed 18 per cent.
“Only one return must be required to be filed once in a quarter. The process of refund must be streamlined and refunds must be expedited, releasing blocked capital,” Chidambaram said.