Tax cannot be emotional

There was no difference between centre and state on the rate change proposed by the Union. There was no opposition against that. If anything, the concern was what happens if centre’s revenue goes down, state’s revenue goes down, Nirmala Sitharaman said after announcement of GST 2.0.

We wanted to keep it robust and relevant to the needs of people, middle class, MSME, the large interest of the economy to grow faster. Here, the relevance and need is that the people should get a simplified rate of tax which is friendly. Above all, the structure has to become absolutely simple to understand, compliance has to become simple to understand.

How it will be monitored?

So my approach is one of trust with industry or trade. The intention is good. We want people to benefit. So I start with the point of trust that industry will pass on the benefits.

What is your opinion about inversion?

The inversion problem is the one which caused a lot of bitterness within the GST… Because of the pressure of some section of industry, we changed it at the end user rate, and in some cases, we changed it in the procuring itself, raw material procurement, manufacturing, then going to the wholesaler and then…. That is the biggest thorn which created all the inversion problem, then the refund problem, then the gaming of the system problem, shell company problem, and everything. Now, what we’ve done is to even it out largely.

Some of the sectors are disappointed?

We may have an emotional attachment to a sector. We may have an emotional attachment to my constituency where there is a particular industry. I may see a sympathetic, humanitarian approach on one particular sector. I may see a job potential in a third. I cannot have GST satisfy me on this or that. Tax goes on a principle. I tax the value added in a particular process of manufacturing, or I tax a particular value addition because of the service component which comes in, and therefore, the tax moves accordingly…

It is for the manufacturer to reform his business formula accordingly. Tax cannot be emotional.

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