‘Government failed to address structural issues of GST reform’

New Delhi, Oct 7 (IANS) The Congress on Saturday welcomed the measures announced by the Narendra Modi government to ease concerns over the Goods and Services Tax as "interim relief to certain sections" but accused it of failing to address structural issues of GST reform.

"We welcome the interim relief... The government has utterly failed to address structural issues of GST reform through fair and transparent consultations," Congress spokesperson Randeep Singh Surjewalal told the media here at the party headquarters.

He said the entire spirit, direction and purpose of the GST Bill introduced by the United Progressive Alliance (UPA) under Congress was lost due to sheer incompetence of a panic stricken Modi government driven by "adhocism and lost in chaos of its own making".

"Post-demonetisation disaster, a possible 'good fortune' of adding two per cent to India's GDP is being converted into 'misfortune' by sheer ineptitude and amateurish handling of the most important tax-reform," Surjewala said.

Accusing the Bharatiya Janata Party of first refusing to acknowledge the clutter, confusion and cost to economy by botching up the GST conception and implementation, the Congress said that reality dawned with the massive economic downslide.

"One Nation, One Tax has become 'One Nation, Seven Taxes' or more, i.e. 0.25 per cent, three per cent, five per cent, 12 per cent, 18 per cent, 28 per cent and 40 per cent.

"Indian GST rate is now the highest in the entire world. Even the Chief Economic Advisor to this government had recommended the GST rate of 15 per cent to 15.25 per cent as the revenue neutral rate," he said.

In addition, states have the discretion to impose more taxes over and above the GST, the Congress leader said adding that a case in point being the entertainment tax imposed by Tamil Nadu and registration tax imposed by Maharashtra.

"The Prime Minister (Narendra Modi) and the Finance Minister (Arun Jaitley) have failed to address this principal structural flaw."

He said that the government has still not laid down any roadmap nor given any indication of bringing petroleum products, electricity and real estate within the ambit of GST, repeatedly emphasised by the Congress party and all the experts.

"It may be worth noting that the government continues to earn a bonanza tax of Rs 2,73,000 crore annually from cumbersome petro taxes alone," he said.

The Congress leader also took on the government accusing it of putting massive taxes on goods of mass consumption.

"No relief has been given to the common man. Modi government's circumspect motives in taxing all aspects of 'Roti, Kapda and Makaan' continue unabated," he said.

Describing the BJP government as anti-farmer, the Congress leader said that non-grant of any relief to this sector, which is the biggest employment generator, reflects inherent prejudice of the Modi government.

"Reeling under the lack of market-driven MSP and cycle of indebtedness, no relief has been given to the farmer and agriculture sector from burden of taxes.

"Fertilizers, tractor and all other agricultural implements, pesticides and even the cold storages and food grain handling systems are being highly taxed," Surjewala said.

He said that textiles, second biggest employment generator after agriculture, also continues to face deep stress owing to distorted duty structure threatening to wipe out the living subsistence of millions, of traders, cloth merchants, micro, small and medium businesses.

Facing severe criticism over the implementation of GST, the government on Friday announced a slew of measures to ease the concerns of traders, exporters and small business while slashing the rates on 27 items of common consumption, including roti, khakra, namkeens, stationery, man-made yarn -- with most of them brought to five per cent category.