GST an outcome of hard work done in the last 10 years: Shaktikanta Das
GST Bill finally saw the light of the day in the parliament yesterday. It has been in the making for a very long time, you yourself have been a part of it, how rewarding has this experience really been, it is a landmark legislation that even you were a part of? What is going to be the road ahead from here? Shaktikanta Das: GST is an outcome of several years of work. Officers of revenue department and officers of the state governments have worked over the years on this and it is definitely a moment of great satisfaction, not personally for me. It's a great moment for the country, in the economic history of the country it is a great moment. GST is a very transformative piece of legislation. It will definitely give a boost to the real economy at the expense of the parallel shadow economy. It will definitely boost economic activity. Experts have said that the GDP will grow by 1.5-2%. So, it will definitely give a huge boost to economic activity in almost all sectors of our economy. If you see two tectonic economic reform measures which have been taken this year demonetisation and GST and add to that the Jan Dhan Aadhaar Mobile, the JAM initiative of the government so the triumvirate of demonetisation, GST and JAM, Jan Dhan Aadhaar Mobile, I think these three put together it is definitely - it offers a very promising years ahead for our economy. ET Now: There are fears from certain quarters about revenue loss once the GST comes into place, also because the centre has to compensate the states for it, what would you really say to allay those concerns? Shaktikanta Das: For revenue loss there is a mechanism. In fact, there is a separate legislation. There's a separate bill, which has been passed for revenue compensation to the states. It is possible that in the initial one or two years, there could be some revenue loss to the states on account of the CST being abolished. But I think, the revenue inflows will stabilise even in the medium term and I would not expect the revenue loss to continue in any significant manner beyond let us say about three years. The compensation mechanism is for five years but anyway, I mean, we have to see how it unfolds, how it works out, we will have to see and that is the position. ET Now: Many also say that fitments of rates is going to be one issue that everybody would be watching out for, mainly on account of there are a lot of commodities that still do not fall under a particular segment. Do you also believe that fitment of rates could be the next big thing to watch out for? Shaktikanta Das: No, no, I mean, you see on fitment of rates there is already an agreement between the states and the centre. A particular commodity or particular goods if it is taxed at a certain rate, if it is taxed at a certain rate by the centre and by the state together you add both together and whichever is the nearest GST rate to that that will be the GST rate. So, there is almost near unanimity between the states and the centre and the way the GST Council and the officers and the ministers of states and the union finance minister the way the spirit of cooperative federalism in which they are working, I think these issues will be resolved. And in any case there is a GST Council meeting also which is coming up so I am sure they will move very fast. ET Now: We are looking at a unified tax once GST comes into place but a lot of people say there is a need to remove the entry taxes, there is a need to remove those check posts that are currently the stumbling blocks, does the government in a longer have a plan to remove those kind of barriers as well? Shaktikanta Das: For removal of check posts, as you know there is a committee already, committee which is working on it so the principle is one India and one tax, all necessary measure to in that direction will be taken by both central government and by the states together. ET Now: There are concerns around security breach of the GST network, yesterday this question was even raised in the parliament. What kind of measures will the government take to ensure that security breach of the GST data network does not happen? Shaktikanta Das: The finance minister has already replied to this question quite elaborately. In any system, whether it is GST network or any system which you have, even the income tax system the firewalls will have to be robust and naturally the focus will be on that to have very strong and robust firewalls.