Finance Minister Arun Jaitley today explained various provisions of the four key GST related bills to allay the apprehensions expressed by opposition members in the Rajya Sabha.
Responding to the points raised by Rajya Sabha members, Jaitley said these GST bills had enough provisions to deal with the evolving situation as the biggest overhaul of indirect tax would be rolled out across the country.
He said the broad approach have been to in the support of GST.
Talking about the benefits to consumers, finance minister said that the GST bill has an anti profiteering clause that would prevent companies from pocketing the tax concessions.
Jaitley said: “The object of GST is to secure the revene for both the centre and states and it must benefit industry and businesses.”
Allaying the concerns of states over losing the revenue levied by their municipalities, Jaitley admitted that its true that Mumbai would loose earing through entry tax but Maharashtra for the first time would get service tax from Mumbai that hitherto exclusively levied and collected by the centre.
Talking about the penal provisions to check tax evasion, finance minister clarified that no arrest will be made for the tax default up to Rs 2 crore and for the amount between Rs 2 to 5 crore the arrest would be bailable and only in cases of tax default or tax evasion of over Rs 5 crore the arrest will be non bailable.
Finance Minister also clarified that under the relevant constitutional provisions and the CAG law, the comptroller and auditor general of India will have the authority to audit the administration of tax by central and state governments.
Jaitley said under the article 268A and 279A of the constitution the centre and states would have simultaneous powers to levy and manage goods and services tax and it will be jointly managed.
Talking about applicability of a common all India tax on petroleum products, alcohol and real estate sector, Jaitley said GST council can decide the rate and date for bringing the petroleum products under the GST. He, however, clarified that the constitution has to be amended again to bring alcohol under the GST but in case of real estate it could be done without amending the constitution.
Responding to a query by Congress member Kapil Sibal, Jaitley clarified that farmers and agriculturists won’t have to pay taxes under the GST and in case of ancillary products the current status will be maintained.
Talking about the share holding pattern of GST Network, finance minister said that the company would have ‘deep and pervasive control’ of the government while retaining the flexibility of hiring the best available talent. He clarified that the composite share holding of the centre and state in GST Network would be 49% and rest 51% would be held banks and institutions.
Responding to a query by Trinamool Congress member Derek O’ Brien, Jaitley said all the recommendations made by the GST council will be placed before Parliament and state assemblies and Parliament will have the plenary powers.