Finally, GST Bill sails through Rajya Sabha

The Rajya Sabha on Wednesday unanimously passed the historic Goods and Services Tax (GST) Bill, paving the way for India’s biggest indirect tax reform that seeks to create a uniform tax structure for the entire country.

The Constitution (122 Amendment) Bill or the GST Bill was passed by 203 members present and voting. The AIADMK, which is against the bill in its current form, staged a walk out. The government is aiming to implement GST from April 1, 2017.

The bill seeks to subsume at least 12 types of indirect taxes levied by the Centre and the states, thereby reducing the rate at which the people pay taxes. At present, a consumer in most of the cases has to pay 30% more taxes on goods than the cost of its production due to excise, VAT, Central Sales Tax and other levies.

Similarly, a manufacturer has to pay a host of indirect taxes, including service tax.
“The guiding principle of the GST legislation will be that the (tax) rates should come down. I share with you that the rates have to come down but around 8% fall from current rate seems utopian and does not seem real,” said Finance Minister Arun Jaitley, while replying to the debate on the GST Bill in the Rajya Sabha.

The Opposition Congress has been demanding a cap of 18% on the basic GST rate. Chief Economic Adviser Arvind Subramanian has suggested a 17%-19% band within which the slabs can be fixed.

Jaitley said the rates have to be such that they do not force federal bodies to lose their revenue. The finance minister said the states were not agreeing even with the 17%-19% band as they were losing revenue.

“The Centre has to look into their demands before fixing the rate,” Jaitley said, indicating that the GST rate will be above 19%.

Revenue Secretary Hasmukh Adhia said a roadmap for the rollout of GST will be announced on Thursday.

Most of the debate centred around the GST rate and is expected to come up for discussion in the winter session. 

Later, a buoyant finance minister walked up to the Leader of the Opposition in the Rajya Sabha Ghulam Nabi Azad and former finance minister P Chidambaram and thanked them for their support to a legislation which could see the light of the day 13 years after it was first mooted.

Prime Minister Narendra Modi tweeted: “the reform will promote Make in India, help exports and boost employment”. The bill was stuck in the Rajya Sabha for more than a year as the NDA government does not have a majority in the Upper House.

Now to the states
The next major step after the bill is approved by the Lok Sabha is to get it cleared by 50% of the state legislatures. This implies that at least 15 of India’s 29 states have to clear the bill before it is signed by the President.

But, the task does not end there. The Centre has to bring in two more legislations in Parliament to implement the GST related to Central, state and inter-state GSTs. It is only then that the Bill will be ready for implementation.
DH News Service