New Delhi: Days after Tamil superstar Kamal Haasan slammed the government over the proposal to tax film industry at 28% under the Goods and Services Tax (GST), Finance Minister Arun Jaitley has said that using media to pressurise the government was not going to make a difference.
“We will look at each and every representation. But using the media as a propaganda to pressurise the government is not going to work. We won’t be arm-twisted,” Jaitley told CNBC-TV18’s Shereen Bhan in an exclusive interview.
Jaitley said weighted average of entertainment tax was 29.1 per cent, which would be only 28 per cent under GST.
Jaitley’s statement came after the film industry’s protests against the proposed GST received a shot in the arm last week when actor, director and producer Kamal Haasan spoke out, seeking lower tax slab for the industry.
“We should remember that this is not East India Company,” Haasan had said.
“We have spoken to politicians from several states. We see this as a big punishment for our industry. We are requesting the government to reduce the tax slab,” he added.
Taking offence at the proposal to charge cinema the same tax rate as ‘sinful’ items like alcohol and tobacco products, he said, “Cinema is my life…. I am offended that cinema has been put under sinful category.”
Haasan said it was a wrong idea to club Bollywood movies, which have a budget of crores of rupees, and regional cinema, often produced on shoestring budget, in the same tax slab. “Regional cinema is the strength of Indian cinema. We need to maintain this diversity. We cannot bring monoculture. When industry cannot afford such high tax rate, it will collapse,” he warned.
Jaitley acknowledged there could be teething troubles early on but said post-GST rates will be effectively less than current rates. The GST Council has already fixed rates of nearly 500 services and 1,211 goods. Tax rate for marble, granite has already been lowered; footwear tax rate has been brought down, and the weighted average of entertainment tax is 29.1 per cent, which is down to 28 per cent under GST, he said.
Besides, the GST Council has also made provisions for control rooms in the initial phase to manage any glitches or hurdles, he said.
Calling the GST Council India’s first federal institution, Jaitley said it is our duty to avoid voting in the Council.
The officers’ panel will go through GST representations, and report with recommendations on June 11 when the GST Council will discuss all undecided issues. The Council is open to reason if there is any arithmetic mistake, he said.
On the contentious issue of the structure of Goods and Services Tax Network (GSTN), Jaitley noted it was decided by UPA government and having reviewed the structure, there was no reason to disagree.
The government has a veto on GSTN decisions and a majority on its Board, he said. An order has been passed to allow CAG audit for GSTN, he added.
Talking about GST Network, he said the technology body, which powers the infrastructure for the tax, is also ‘extremely confident’ of July 1 rollout of the indirect tax regime, even as some industry voices have expressed concern GST is being rushed through.
Jaitley also defended the GSTN’s structure, built as a private-sector company, and whose shareholding structure has been questioned by some, including maverick leader Subramanian Swamy.
“The GSTN structure was decided by the UPA government. We reviewed it and saw no reason to disagree,” FM said. “The structure allows them to hire the best professionals. The government has a veto on GSTN decisions and a majority on the board. We have passed an order to allow CAG audit for GSTN.”