"Trust-Based Tax System": Amit Shah To NDTV On New GST Structure

Union Home Minister Amit Shah has said the new GST structure, which came into effect today, is a "trust-based tax system" that would increase both production and consumption in the country. While speaking to NDTV's Editor-in-Chief Rahul Kanwal, Mr Shah asserted that there would be a "new era of mutual trust" between the people and the government.

"Electricity, cement, daily consumption of food, healthcare, insurance, automobiles, cars, trucks, tractors, and all products used in agriculture will be cheaper. This is a very big decision. People will start receiving benefits today onwards. I believe that this will increase production and consumption. There will be a trust-based tax system in the country," Mr Shah said.

According to Mr Shah, with the GST reforms, the people of India would believe that the tax is "not to increase the government's income" but to "run the country".

"Whenever there is an increase, the government reduces it. Prime Minister Narendra Modi has made this big decision. There will be trust in the 1.3 billion people of the country that tax is not to increase the government's income. It is to run the country. I believe that there will be a new era of mutual trust between the lender and the government," he said.

The Union Minister said that the GST has been collected from Rs 80,000 crore to Rs 2 lakh crore. "It is time GST gives relief to the public. We could even go from Rs lakh crore to Rs 2.5 lakh crore. But for now, the system has been made. The collection has increased. People will get relief from many things," he told NDTV.

Amit Shah Jabs Opposition

The Minister took a jibe at the Opposition, who have been criticising the GST structure since it was created, saying "some politicians" have discredited and defamed it.

"They called it a waste tax. Then they saw that it was becoming successful. They then said it was our idea. Pranab Mukherjee had thought about it. P Chidambaram had thought about it. You stole our idea. They were not able to implement it when they had been in power for 10 years. PM Modi implemented GST in his fourth year itself," Mr Shah said.

According to Mr Shah, states had opposed the idea of GST during the then Congress-led government. "Because, naturally, by collecting 16 types of sales tax, we make one sales tax, we make GST. In this, 16 types of tax will merge. So, it was going to affect the income of the states. When Congress came up with this idea, the states said that the adverse effects should be paid by the central government. They said, yes, we will do it. So, the states asked for a constitutional guarantee which they did not give," he said.

"Now, if no one gives a constitutional guarantee, then who will trust them? When PM Modi came into power, he started the discussion again. At that time, Arunji (Arun Jaitley) was the Foreign Minister. The same problem came again. Then, PM Modi said, we had said that a constitutional guarantee should be given. So, how can we turn back? At that time, the foreign ministries, bureaucrats, foreign ministers, and everyone had a huge responsibility. For five years, you will take a 14 per cent increase guarantee and pay it. Still, they agreed to it," he said.

Mr Shah said the guarantee was completed by last November.

"Because of this, GST was approved, and it was successful," he added.

GST 2.0

The new GST rates have come into effect today, with a plethora of household items, cars, bikes, and TVs, among others, becoming cheaper. The changes, the biggest overhaul since GST was introduced in 2017, will see the current 5 per cent, 12 per cent, 18 per cent and 28 per cent structure replaced with just two rates - 5 per cent and 18 per cent.

Under the new reforms, daily food and essentials, life and health insurance policies, automobiles and transport, electronics, appliances, stationery, beauty services, lifestyle services, and machinery will become cheaper. The ultra-luxury items will be taxed at 40 per cent, while tobacco and related products will stay in the 28 per cent plus cess bracket.

Prime Minister Narendra Modi addressed the nation on the eve of the GST 2.0 rollout, saying the country is taking a "big step towards Atmanirbhar Bharat on the first day of Navratri".

"Tomorrow, next-generation GST reforms will be rolled out. A GST savings festival is going to begin. Your savings will go up and you can buy your favourite items easily. The poor, the middle class, youngsters, women, and traders would benefit immensely from the GST reforms. These reforms will accelerate Bharat's growth story, enhance ease of doing business, attract greater investment, and ensure that every state becomes an equal partner in the nation's development," he said.

The Prime Minister said that his government had made the "historic" move to bring in GST in 2017. "For decades, our people were entangled in a web of different taxes. So, we made GST a priority in the national interest. We spoke to every stakeholder and addressed the concerns of the states. With the support of all states, this massive tax reform could be implemented," he said.