Sitharaman favours once a year changes in GST rates

"I think we have laid the foundation for increasing consumption, ensuring that capex (capital expenditure) and government's investments will go towards spending on building of assets in infrastructure which should have cascading effects both in the short term and in the long term," Sitharaman told reporters.

 

New Delhi:

Union Finance Minister Nirmala Sitharaman on February 9 said the Centre, in the Budget 2020, has laid the foundation of increasing consumption while ensuring that the government's investment is deployed to build infrastructure leading to a $5 trillion economy by 2024-25.

 

She also pitched for rationalisation of GST rates once a year and not every three months as was the trend so far.

 

 Sitharaman said that frequent changes in GST rates have led to an inverted duty structure, where the raw materials ended up becoming costlier than the finished product, in some cases which also created problems with tax refunds.

 

“Therefore, when the rate of tax of one item is brought down, a whole lot of other ripple effects are created. With that ripple effect, refund is affected," Sitharaman said at a post budget interaction with reporters in Kolkata.

 

As a result, businesses claimed that they are not able to plan how much they need to keep aside for taxation in a whole year. Similarly, governments (states and Centre) are not able to make an assessment of what they will earn from GST in the whole year, she said.

 

"I think we have laid the foundation for increasing consumption, ensuring that capex (capital expenditure) and government's investments will go towards spending on building of assets in infrastructure which should have cascading effects both in the short term and in the long term," Sitharaman told reporters.

 

She said, "In order to address rural distress, 16 focused action points have been announced in the budget. So I expect all this will lead to a five trillion dollar economy."
 

Asked about what West Bengal has received from the budget, she said, "I do not know how I answer this question of kisko kya mila (which state gets what). I am looking at the point of macroeconomic stability, building assets in the country, money directly going to hands of individuals because of reduced tax rates and so on."

 

Announcements were made in the Budget about various projects which are happening in different states, the finance minister said.

 

Sitharaman said that the government wants continuous engagement with industries and businesses and will act as a facilitator for hassle-free payments of taxes.

 

"The broad message which is apparent is that the government wants continuous engagement with industry and business. And my presence here is not in response to what is happening inside (country) and outside," Sitharaman said.

 

She said the Centre has introduced some features in the budget like "faceless appeals and sorting out of problems while imparting tax administration".

 

Sitharaman said this will be made possible only with the help of new technology.

 

"Over the years, we had to remove all the dead wood gathered with a pincer. This will help the government to fulfill its commitments made in the budget," she said.

 

Referring to issues relating to GST, the finance minister said it is not the Centre to initiate steps for reduction of rates, the state ministers should also represent cases so that a synergy could be built.

 

Responding to Tea Board chairman P K Bezbaruah's remarks on the scarcity of ATMs in the tea belts of Assam and West Bengal for which "cashless wage payments are becoming a problem", the finance minister said the government is willing to set up ATMs in pockets where there are none.

 

"I know that number of ATMs is miniscule in the tea growing regions. The government is ready to set up such facilities in these areas," she said.

 

Finance secretary Rajiv Kumar said that "there is a need for credit offtake to pick up for genuine businesses.

 

"Commercial lending has to go up. The Central Vigilance Commission (CVC) has already appointed a committee to differentiate between genuine business failure and a fraud," he added.
 


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