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Chidambaram: GST, with its many rates, 'very, very imperfect'

Chidambaram added that experts feared GST might be inflationary in the short run. Photograph: (AFP)

WION Web Team New Delhi, Delhi, India Jul 06, 2017, 04.09 PM (IST)

Former finance minister P Chidambaram has said the Goods and Services Tax -- with its many rates -- is "very, very imperfect". 

And that since it has seven or more rates, it cannot be called "one nation, one tax". 

That has been one of the main criticisms of the GST -- that it has too many rates. 

"It is a mockery of the GST. When we have rates such as 0.25, 3, 5, 12, 18, 28 and 40, and possibly more because of the discretion vested with state governments, how can we call this a 'one nation, one tax' regime," said Chidambaram. 

The main aim of the GST had been to replace India's many indirect taxes with one single tax, turning the country into a single market. 

A single tax would allow for the seamless and faster flow of goods from one state to another. 

Chidambaram also said that both authorities and businesses were "unprepared or under-prepared" for GST and that it should have been put on a trial run. 

He also added that experts feared GST might be inflationary in the short run, but that his party would welcome any measure taken to contain inflation.
 

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