There can be no tax law in this country without a tax rate, the former Finance Minister P. Chidambaram said on Wednesday. “It would be like Hamlet without the Prince of Denmark,” he said adding that there could be a debate on whether the rate should be mentioned in the Goods and Services Constitutional Amendment Bill or in the subsequent legislation.
In doing so, Mr. Chidambaram addressed not just the government but also senior leaders in his own party — such as Congress president Sonia Gandhi’s political secretary Ahmed Patel and the former Union Minister M. Veerappa Moily — who questioned on Tuesday the party’s decision to agree to back the GST Bill though it does not mention the tax rate.
To a question on the doubts within his own party, Mr. Chidambaram said: “Initially people can have questions and doubts but these have been addressed … Corporates have spoken up for the Bill, someone must speak up for the people and the Congress is doing that.”
At a press conference after he participated in the debate on the GST Bill in the Rajya Sabha, he said: “We hope that before the debate ends, the Finance Minister will answer some of the questions raised by the Opposition parties including mine. We want assurances on our demands . I only want to emphasise one aspect of the Bill. There can be no tax law in this country without a tax rate.”
“I know of no law which can be called a tax law which imposes the tax which does not mention a rate. We can debate whether the rate should be mentioned in the Constitutional Amendment Bill or in the subsequent legislations,” he said. He said it was only because the Congress recognised that it would be difficult to mention a rate in the Constitution Amendment Bill as Finance Ministers of various States had various positions on the Bill, that it had deferred its demand.
He, however, made it clear that the Congress expected “that the demand will be addressed when the other Bills are brought before Parliament. I have also explained in great detail why the revenue neutral rate should be approximately 15-15.5 per cent and why the standard rate should be 18 per cent. This is a regressive tax, an indirect tax,” he said.
Mr. Chidambaram then added that there was broad consensus among the Opposition parties that a standard rate of 18 per cent recommended in the Chief Economic Adviser’s report would be appropriate. If this figure was accepted, he said, the GST would be non-inflationary, and it would be something which could be sold to the people of India.
“We have demanded an assurance that the GST Bill and the IGST Bill should not be brought as money Bills. Too often, this government has pushed through Bills as money Bills,” he added.
Explaining the Congress’s change of heart on the Bill after its initial opposition to it, he said it was because finally, the government had “seriously engaged with the Congress and moved from an inflexible position. I have said the Bill should be passed not on numbers but on the strength of arguments.”
It was clearly a flawed Bill, he continued, adding that though it had improved it was still “not entirely to our satisfaction.”