GST demonstrates cooperative-competitive federalism: Modi

GSTNew Delhi : The implementation of GST from last month is testimony to the strength of the spirit of “cooperative and competitive federalism” in the country and has immediately resulted in a 30 per cent increase in efficiency in the transportation sector, Prime Minister Narendra Modi said on Tuesday.

“GST (Goods and Services Tax) has shown that the spirit of cooperative-competitive federalism has gained strength. Crores of people in the country have come together to support GST and the role of technology has also helped,” Modi said in his speech here on Independence Day.

“The world is looking with amazement at how, in such a short time, so many people have been brought into the system…this shows the capability of India,” the Prime Minister said.

From July 1, the pan-India GST replaced around a dozen central and state taxes with a single national tax.

Modi said the movement of goods had become much simpler without any check posts across the country replacing the earlier system, where a product was taxed multiple times and at different rates.

“After GST, 30 per cent time is being saved by trucks, without being hindered any more by checkposts. The transport sector efficiency has increased by 30 per cent,” Modi said.

“Thousands of crores of rupees are being saved..GST will bring more transparency into the system,” he added.

After the GST Council fixed the rates of 1,211 products in four tax slabs of 5, 12, 18 and 28 per cent, it has received requests for changes in rates on more than 125 different products from various stakeholders aggrieved by their fitment in the new indirect tax structure

For instance, last week the Union Petroleum and Road Transport Ministries announced it will ask for a reduction in GST on bio-diesel from the current 18 per cent to 5 per cent. According to the stakeholders, the high GST on the clean fuel, which attracted zero excise duty, will make it costlier than diesel and, thereby, make it uncompetitive.

In this connection, Minister of State for Finance Arjun Ram Meghwal said here on Saturday that the number of tax slabs in the GST regime would be reduced with improvement in revenue.

Meghwal also said as many as 13.2 lakh new dealers have registered themselves in the system after the implementation of GST.



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