In a scathing attack on the GST in its current form, senior Congress leader and former finance minister P Chidambaram on Saturday said it will put a burden on the common man and hugely affect small, medium and micro businesses and entrepreneurs while being inflationary with multiple rates.
The anti-profiteering provision in the new law will be an instrument of harassment in the hands of officials, he told a press conference.
Chidambaram said 80 percent of all goods and services will bear a tax and prices will be higher. “There will be inflation. What is the government going to do about it?” he asked.
He said small, medium and micro scale entrepreneurs and traders will be affected in a “big” way because they are not ready for the roll out of the new law. “They asked for more time. They have been denied time,” he said.
Chidambaram said a “peculiar arrangement” has been made in the name of compromise and the law was being hastily implemented while the traders and business wanted some more time because they were not prepared for it yet. The consequences of the new law will be known only after some time, he added.
“This not the real GST that the Congress had desired and the ideal GST devised by experts. Nothing can be a worse legislation than this,” he said.
Chidambaram said the UPA government had done all the homework for the law and at that time the BJP had bitterly opposed it. “The same BJP, when in opposition, had protested against the GST tooth and nail. No one can deny this fact,” he said.
He said ideally GST meant one tax and the Congress had accepted the concept of a standard rate of 15 percent along with a standard plus or standard minus rate.
“We had said at any rate the tax cannot be beyond 18 percent. We also accept the fact that there cannot be one tax rate in view of the current economic situation.”
Chidambaram, who had included the GST proposal in the Union Budget for the first time when he was Finance Minister, said against the concept of one rate, there are multiple rates now — zero percent, 2.5 percent, 3 percent, 5 percent, 15 percent, 18 percent, 28 percent and 40 percent.
