The Aam Aadmi Party that is in power in the national capital has decided to skip the midnight launch of GST, which has been described as India’s biggest tax reform to replace a maze of indirect taxes imposed by the centre and states with a single tax.
Given the high rates of tax that had been decided, Mr Sisodia, also Delhi’s Finance Minister, said, his conscience didn’t allow him to be part of this.
In any case, the minister said common people could celebrate if they are happy with GST. “Why us,” he asked. If the government does something good and the public feels so too, “the public, the markets will celebrate. That is a celebration,” he said.
“Celebration is not that traders are protesting that for the first time since Independence, clothes, slippers and fans, tiles are being taxed… at 28 percent,” the minister in the AAP government said. “What was the need to raise the tax rate so much,” he said, recalling that he had opposed the tax rates at the GST Council headed by Finance Minister Arun Jaitley. But his voice was drowned.
The tax rates decided by the government, he said, were far too high and reflected its “wrong approach and attitude”.
Higher tax rates don’t lead to increase in revenue but only encourages tax evasion, expands the grey market and gives tax inspectors opportunities to collect more bribes, Mr Sisodia said, pointing how the Delhi’s government’s revenues had shot up within years of reducing the tax rates in Delhi.
He also questioned the central government for keeping real estate and alcohol out of the purview of GST. “Why was this done? Because black money gets invested in liquor business and you kept it outside GST. This is not a teething problem. This is an approach problem,” Mr Sisodia said.