Congress promises GST reforms, lower fiscal deficit

The Congress party's manifesto for the general election released on Tuesday promised a single rate GST regime and lower fiscal deficit among other reforms economic reforms.

The manifesto also promises to include petroleum products, alcohol, tobacco and all the sectors of real estate under the ambit of the proposed reformed GST regime which it has named 'Goods and Services Tax 2.0'.

"The GST 2.0 regime will be based on a single, moderate, standard rate of tax on all goods and services. The rate will be revenue neutral to the current indirect tax revenues of the Central and state governments and will take note of the potential of GST 2.0 to boost their tax revenues," said the manifesto.

Essential goods of mass consumption including food grains, lifesaving drugs, vaccines and essential services would be exempt from GST or be zero-rated, if the party comes to power, according to the manifesto.

Also the document said that "all goods and services that are exported will be zero-rated and not subject to GST 2.0."

The party also promised to abolish e-way bills and said that tax evasion will be detected through the risk management mechanism and strengthening the intelligence machinery.

The document also said that if the party comes to power, the GST Council will be the policy-making body and will be served by a permanent secretariat of tax economists, tax policy experts and tax professionals and its minutes will be put in the public domain.

It said that the Direct Tax Code (DTC) and GST 2.0, both promised by the party, would be civil laws and any violations will attract civil penalties that will be proportionate to the tax evaded.

"Prosecution under DTC and GST 2.0 will be only in cases of criminal conspiracy or corruption or fraud," it said.

On the fiscal front, the party promised to bring India's fiscal deficit down to 3 per cent of the GDP by the financial year 2010-21.

"Congress promises to reverse the BJP government's fiddling with the target of fiscal deficit. Congress promises to achieve the target of 3 per cent of GDP by 2020-21 and remain under that limit. The revenue deficit will be contained, as far as possible, under 1 per cent of GDP," said the document.

The manifesto said that the party, if in power, would welcome Foreign Direct Investment (FDI) in all sectors, subject to exceptions on the ground of national security and both foreign and domestic investors would be given equal treatment.

"Rules and regulations will be minimal. FDI will be accorded national treatment and there will be a level playing field for foreign and domestic investors. There will be no expropriation and no retrospective taxation."

--IANS

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