Nirmala Sitharaman remembers Arun Jaitley; recounts GST benefits

On the first death anniversary of Arun Jaitley, Union Finance Minister Nirmala Sitharaman recounted the benefits of Goods and Services Tax (GST) as a tribute to him in a column published on The Indian Express.

Stating that the introduction of GST was a major reform that the Indian economy had waited for over a decade, Sitharaman said that "with his affable nature, Jaitley built on the mutual trust, so required in the critical years, when the decades-long efforts were reaching a crescendo."

The GST subsumed 17 different taxes and 13 cesses, ensuring that India became one market, interstate barriers disappeared, double taxation was eliminated, and the cascading effect of taxes got mitigated.

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Sitharaman penned down the journey of the GST and stated that a Reserve Bank of India (RBI) analysis observed that since its roll-out, the rate changes have brought down the GST incidence from 14 per cent to 11.6 per cent. The Finance Minister noted that several other concessions were brought in including taxation threshold for goods being increased to Rs 40 lakh, the composition limit being increased from Rs 75 lakh to Rs 1.5 crore.

Remembering Jaitley as a vital part of the GST implementation, Sitharaman recalled how he had described the Council as “the first experiment with the federal institution”. She noted that he rightly had felt that “it is a body that has behaved with utmost responsibility.” Until now, the Council has had 40 meetings and the 41st is slated to be held on August 27.

The Finance Minister recalled that in the Council meeting held on January 3-4, 2017, Jaitley as the chairperson “assured that compensation to states shall be paid for 5 years in full within the stipulated period of 5 years and, in case the amount in the GST Compensation Fund fell short of the compensation payable in any bimonthly period, the GST Council shall decide the mode of raising additional resources including borrowing from the market which could be repaid by collection of cess in the sixth year, or subsequent years.”