GST reform is a constructive decision: Shashi Tharoor

Congress MP Shashi Tharoor on Friday called the Goods and Services Tax (GST) reform a constructive decision, stating that having four different GST rates was not just confusing but also unfair.

“GST reform is a very constructive decision. We have been calling for it for some years now. My party has been advocating for the simplification of GST from the very beginning. Having four rates was not just confusing but it was also unfair,” Tharoor told reporters in Singapore.

The Congress MP said that the GST rate rationalisation should stimulate the economy. “By and large we have got something good. It should stimulate the economy. We hope it would stimulate manufacturing because the idea would be that if consumers start spending more and buying more, then manufacturers will make more and employ more people. And this virtuous cycle will continue,” said Tharoor.

The Congress MP said very often when one goes to a shop to buy 10 items which are covering 4 different rates, the shopkeeper, in order to make his life easier, will charge the highest rates.

“So, ordinary people were feeling that they were short-changed in this process. Now, you have a simpler situation with two rates, a bulk of common household items for the lower middle class, are at 5%. Relatively more expensive goods are going to be more high and only a handful of items are in the luxury rate, which in any case is punitive,” said Tharoor.

Tharoor said he wants to see more market reforms coming up. “One thing that is overdue in our society and economy is cutting down on the number of regulations that are there. We are the most regulated economy in the world. We can learn from places like Singapore where regulations are so much more simple and efficient,” said Tharoor.