1% Additional Tax in GST Has the Potential to Undermine Make in India: Chief Economic Advisor

While talking about the achievements of the Narendra Modi government in the last one year, Chief Economic Advisor Arvind Subramanian said the government now has sufficient time to think over the proposed 1 per cent additional tax in GST (Goods and Services Tax). He said it doesn't sit comfortably with the principle of GST and would favour international trade over intra-national trade. Coming strongly against the addition tax, he said it also has the potential to undermine the government's 'Make in India' campaign.

Speaking to the reporters in New Delhi, Mr Subramanian said levying additional tax would rather make the import easier into Tamil Nadu from Bangkok than going from Gujarat to Tamil Nadu, crossing 4 states.

Meanwhile, Finance Minister Arun Jaitley has been speaking extensively about the benefits of this 1 per cent additional tax. He has been saying that it will help the manufacturing states. This tax was proposed in the GST Constitutional Amendment Bill for a period of 2 years to address the concerns of the manufacturing states considering GST will help the consuming states more.

Mr Subramanian also said, "We need to look at this provision carefully. This period that we have gained, some of these issues need to be looked at again."

The government plans to roll out GST from April 1, 2016. The bill has been passed in Lok Sabha, but it has been referred to a select committee ahead of a vote in Rajya Sabha, where the government does not have a majority. The government is confident about getting the GST bill passed in the next session of Parliament.