Amit Mitra writes to FM: Not right time to hike GST rates

Amit Mitra writes to FM: Not right time to hike GST rates

Arguing against the planned move to correct inverted duty structure in Saturday’s GST Council meet by hiking tax rates for a few mass-consumption items produced by employment-intensive sectors, West Bengal finance minister Amit Mitra asked Union Finance Minister Nirmala Sitharaman that such changes could wait till the economy stabilised.

In an attempt to correct one type of error concerning the goods and services tax (GST) rates, namely inverted duty structure, the Council might end up causing further downturn in job-intensive sectors and the agrarian economy, Mitra cautioned in his letter to Sitharaman.

Rate hikes for several items including textiles, footwear, fertilisers, mobile phones, tractors and renewable-energy devices have been recommended by a fi-tment committee under the Council. Inverted duty structure denotes prevalence of higher taxes on inputs than on finished items.

Mitra wrote: “Markets in India are facing a double whammy with stagflation on one hand and the looming effects of the coronavirus outbreak on the other … May I urge you not to make changes in the rate structure during these perilous economic times, particularly keeping in mind the interest of the common people.” FE.