On Monday the Lok Sabha took up the GST Constitution Amendment Bill which was passed by the Rajya Sabha last week to pave the way for the historic tax reform – the GST.
The Lower House took up the modified constitution amendment bill to approve the modifications made in it by the Rajya Sabha last week.
Finance Minister Arun Jaitley made a strong pitch for the legislation before the Lok Sabha and assured the House that the Centre had addressed concerns of all states on the matter. He also spoke about the major bone of contention – the tax rate – which is yet to be decided.
“GST will ensure one tax in the entire country. It will result in seamless transfer of goods and services in the country…This is a major indirect tax reform which will in long run, be in interest of the country,” Jaitley said as he moved the modified constitution amendment bill in the Lok Sabha.
Rates of taxation will be decided by GST Council which comprises of members from both the Centre and states, said Jaitley.
Jaitley also spoke about how the ease of doing business will improve with the implementation of the Goods and Services Tax. He also said that the GST regime will drastically reduce tax evasion.
Earlier, the government had moved six official amendments, including scrapping of 1 per cent additional tax.
On the issue of of states giving up sovereign power to levy taxes, the minister said it is not the case, “states and the Centre will be pooling in their sovereignty together and creating a new mechanism which will take all its decision within that pooled sovereignty.”
Jaitley thanked all political parties for showing unanimity in passing the bill in the Upper House.
After facing fierce opposition over the Bill for almost a year, the government succeeded in bringing all major opposition parties, including Congress, on board before it was passed in the Rajya Sabha on August 3.
The Constitution (122nd Amendment) Bill, 2014, that would lay the ground for roll out of GST regime, was passed by the opposition-dominated Upper House after the government moved four amendments.
Aiming for early implementation of the Goods and Services Tax, senior union ministers have spoken to chief ministers of NDA-ruled states to ensure that the constitutional amendment is ratified by state assemblies at the earliest.
The chief ministers have assured that, if required, they will call a special session for the passage of the Bill in their state assemblies.
The GST Bill has to be ratified by at least 16 states in 30 days after it is passed by Parliament.
Once implemented, GST will subsume various taxes, including excise, services tax, octroi and other levies, and the proceeds will be shared between the Centre and the states.
Under the new GST regime goods would be taxed at the point of consumption, instead of the goods being taxed multiple times at different rates.
The GST Constitution Amendment Bill was passed by the Lok Sabha in May 2015.
The GST, which was first proposed a decade back, is seen as potentially transformative for India’s economy, adding as much as 2 percentage points to the GDP.
(With inputs from PTI)