‘Ill-informed’ opposition leaders have failed to derail the implementation of the Goods and Services Tax and India’s transition to the unified tax regime, Finance Minister Arun Jaitley said, adding that the transition to GST has been ‘fairly smooth’.
On a seven-day trip to the US to attend the annual meetings of the International Monetary Fund and World Bank, FM Jaitley said that the government has introduced some attractive schemes under GST to ensure compliance.
"Many attempts have been made by political groups to derail the GST, but I am glad that their own state governments are not listening to them because they know 80 per cent of the money is going to come to them so they don't have to appease an ill-informed central leader of the party and let the revenues of their own state suffer," Jaitley told a New York audience.
"So, the state governments are being wiser," Jaitley said in response to a question during an event titled 'India’s market Reforms: The Way Forward' organised by the Confederation of Indian Industry in association with the US Chambers of Commerce.
Arguing that GST is going to eventually bring the non-compliant into the tax net, he said that some complaints regarding the GST could be ‘manufactured’ and that the government needs to be able to differentiate them from genuine concerns.
"There are going to be different complaints -- some legitimate some manufactured thrown up by the non- complaint how GST is creating a problem for them," he said.
Jaitley also lauded the GST Council as India's first genuine federal institution, which meets every month, reviews the monthly situation, takes the decisions, reviews the rates and changes of rates which will take place in the times to come itself.
"It's been a fairly smooth transition," he said, adding that the slabs fixed by the GST Council do not exist anywhere in the world. The lowest slab of 5 per cent, he said, was primarily aimed at the non-compliant to draw them into the tax net.
"The lowest slab in India is five per cent, which doesn't exist anywhere in the world. That is because of the non-compliant tax character of the Indian society. You make it easy for people to enter the taxation system that you are able to expand. In the GST, for up to 10 million turnover we now have a scheme for them," he said.
"We are trying to bring them into the tax net because the first two months data has shown that almost 95 per cent of the tax is just being paid by 400,000 accesses. Therefore, it's very top heavy in terms of payment. And there's a need to continue to expand the tax base at the bottom itself," he said.
At the event, Jaitley said global integration of the Indian economy is happening at a time when other economies are becoming more protectionist. He also stressed that simplification of procedures and other steps taken by the Indian government in the past three years had made India a better place to do business with.
Jaitley said that as much as 95 per cent of the investments are through automatic route, and foreign investment promotion board has been abolished. Today, 99 per cent of tax queries are addressed online, he said.
Jaitley said India is now capable of taking big decisions and implementing them at a large-scale. “As many as 250 highways projects are under construction. India is now having surplus power and the capacity of Indian ports have been expanded,” he said.
Responding to a question on digital payments, he said the younger generation is taking on to modern payment methods in a big way.
Further, all government benefits are linked directly to bank accounts. The government has introduced low cost insurance policies to incentivise the bank holders, he said.
Jaitley also addressed American investors on recent economic reform initiatives. He is slated to address the Columbia University students today.
Before arriving in Washington DC for the annual IMF and World Bank meetings, Jaitley will travel to Boston to address the students of the Harvard University and interact with the US business community in Boston.
During his three-day stay at Washington, the FM will hold a bilateral meeting with US Commerce Secretary Wilbur Ross.
He will also participate in an interactive seminar organised by the FICCI on -- "India Opportunity Conference" and attend the G-20 Finance Ministers and Central Bank Governors' Working Dinner on October 12.
(With PTI inputs)