Has the FM ignored the CEA report on GST completely?

It seems like the Finance Minister has ignored the suggestion given by the Chief Economic Advisor (CEA), Arvind Subramanian completely. The stance of the centre was to cap the GST at 23 per cent, introducing 1 per cent additional tax to be levied on the manufacturing state.

In December 2015, CEA committee led by Arvind Subramanian had submitted a report to the Finance Minister, Arun Jaitley discussing on the GST and rates at which it should be capped. According to the report, the committee suggested a revenue neutral rate of 15 to 15.5 per cent for GST. Panel also recommended eliminating all taxes on inter-state trade, including 1 per cent additional tax proposed in the GST Bill.

Interestingly, CEA committee and major opposition was thinking on similar lines to keep the standard rate between 17 to 18 percent. The panel suggested a 40 per cent GST rate for luxury goods and tobacco at the higher-end and 12 per cent at the lower-end for essential goods.

Today i.e. August 3, P. Chidambaram, raised some serious questions in the upper house. There are three major issues raised by P. Chidambaram:

1. P. Chidambaram, pointed that the centre has made some provisions of what will or will not go in consolidated fund of India in the amendment. This should have been thought of earlier. Revenue must go in consolidated fund. It can't go anywhere else. The draft bill leaves it unanswered.

2. Dispute resolution between the Centre and a State; or between two States; or between a group of States is not a matter on which the Constitution remains silent.

3. Rate of tax should be low, rich countries have a GST rate of 16.8, emerging countries have 14.1 per cent. Therefore, the current tax should be as low as possible.

The major question here is why has Finance Minister, Arun Jaitley ignored the suggestion given by the CEA committee; and it is evident that he has not done his homework before placing the bill in front of the upper house.