Former Finance Minister Chidambaram insists on mentioning 18% GST rate in the amendment bill

The Centre thought that it had reached a political consensus over the crucial Goods and Services Tax (GST) Bill but former Finance Minister P. Chidambaram threw a spanner in the Indian government’s plans.

After the present Finance Minister Arun Jaitley presented the GST Bill for Constitutional amendments, Chidambaram said even though the recommendations by the opposition were included, the bill was still clumsy.

“In the present list of amendments, you have made some provisions of what will go into the consolidated fund of India. Second issue is multiplicity of taxes. If you give some states power to impose additional 1% tax, it would have led to multiplicity of tax rates. Third major issue is of dispute resolution. Dispute resolution between states and Centre is not a matter on which Constitution is silent. Article 131 speaks loud and clear,” said Chidambaram in the Rajya Sabha.

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Chidambaram said the GST was also a major concern for the people of the country and was not only a matter between Union Finance Minister and state finance ministers.

“GST rate should not be changed by the whim of the executive but by approval of Parliament. The heart of the GST is what the rate of tax will be. Any indirect tax falls same on rich and poor, thus it's advisable to keep it as low as possible,” said Chidambaram.

Chidambaram insisted on including the 18 per cent GST rate in the amendments itself, before it went to the GST Council for including further recommendations.

He said the Congress was never against the idea of GST but was not in favour of few clauses in the bill in 2014.

“Just as 2011 GST bill opposed, similarly 2014 bill was opposed and not the idea of having one. Rationale of GST is to avoid multiplicity of taxes, thus the idea of inter-state tax rate had to be removed,” said Chidambaram.