Indian GST is not an ideal one because of its federal nature: Prof Bibek Debroy

New Delhi, June 30 (KNN) Professor Bibek Debroy, NITI Aayog Member as well as a renowned economist, today rubbished the claims that GST would increase the country’s GDP by 1.5 per cent.

"There are talks that the GST would increase the GDP growth rate by 1.5 per cent. This is total rubbish," Prof Debroy said.

He was speaking at on GST and the related challenges, at GST Conclave organized by India Today.

He said "Such speculations are based on the assessment of the 13th Finance Commission, which gave that figure for an ideal GST. We are nowhere near an ideal GST."

Prof Debroy said that one of the key problems with the present GST (Goods and Services Tax) regime is its multiple rates structure.

On talks that 140 countries or 160 countries in the world that have GST, he said, “This is rubbish."

"There are many countries in the world have VAT, Value Added Tax. A VAT is not GST. The number of countries having GST is 6 or 7, not more than that," said Prof Debroy.

"Except one all are unitary. The only country in the world which is federal and has GST is Canada. India is only the other federal country in the world to have GST," the economist said.

Debroy said that Indian GST is not an ideal one because of its federal nature as setting up of a GST Council to finalise tax rates was compromise forced by the federal structure of the country.

He said had we waited for a perfect GST, we would have debated it for another 17 years or so. I personally look at it as a step in the right direction.