Union minister Arun Jaitley said in a blog post on Friday that the 28% category of goods in under the goods and services tax (GST) is being phased out and the bracket currently covers mostly luxury items or sin goods. The tax on other items outside the luxury-sin goods such as cement, air-conditioners, large screen televisions and a handful of others could also be reduced as revenues rise.
“Thus within a record period of thirteen months, the GST Council has almost phased out the 28% category. It is only a matter of time that the final obituary of the ‘Congress Legacy Tax’ is written. Only the luxury-sin tax would remain,” Jaitley said in a Facebook post. The past one year has seen rate reduction in 384 commodities and not a single increase, Jaitley said, contrasting the GST regime that rolled out on July 1 last year with the indirect tax regime under Congress-led UPA rule.
“The pre-GST tariff was a Congress Party legacy. The standard rate for central excise plus VAT plus CST was 12% + 14% + 2%. To this, if the cascading effect of tax on tax was added, the eventual tax payable on a commodity was 31%,” he wrote, adding that the tax rate applied even to products used by households such as mineral water, hair oil, toothpaste, soap, dairy as well as goods including construction material and white goods. “The total number of goods falling in this category was 235. This tax was the ‘Congress Legacy Tax’,” he said. He said lower rates have resulted in higher collections.
The rates have been reduced for 68 services as well and total revenue loss following the reduction rated on goods and services is about Rs 70,000 crore. The reduction has reduced the cost to the consumer, increased his capacity and added to the increased consumption in the economy, Jaitley added. “There is no better opportunity for consumers to make purchases than in the environment which the GST has created.”
PREVENTION OF CORRUPTION (AMENDMENT) BILL, 2013
Writing on the Prevention of Corruption Act, Jaitley said it will ensure honest officers will not be harassed by investigative agencies in the process of apprehending the corrupt. The Prevention of Corruption (Amendment) Bill, 2018 also has provision to punish for the first time bribe givers as well with imprisonment of up to a maximum of seven years.
The bill was passed by Parliament this week. Jaitley said the amendment “corrected a fundamental flaw” in the 30-year old anti-corruption law, which was enacted in pre-liberalisation regime and had not anticipated the kind of risk which could be faced by honest decision makers.
The wide definition of corruption and loose language of the old act prompted the investigators to shed their professionalism and follow the “golden rule” of ‘when in doubt, file a chargesheet’
Source : Economic Times