The long-pending GST Amendment Bill has been taken up for consideration and passage in Rajya Sabha. Finance Minister Arun Jaitley initiated the discussion on the much-awaited tax reform on Wednesday afternoon.
The bill has been taken up only after strong indications that the government has been able to bring on board the Congress, the principal opposition party.
While explaining the bill, the Finance Minister said the bill will empower the states and give a much-needed “boost to the Indian economy.”
“It would convert India into one uniform economic market with a uniform tax rate, bring about a seamless transfer of goods and services across the country and enable us to check evasion and therefore enlarge the revenues as far as the Centre and the states are concerned,” said Jaitley while listing the merits of moving into a GST regime.
“GST will ensure that there is no tax on tax,” he added.
Jaitley also stressed on the need for a political consensus for a bill like GST.
“A legislation of this kind can’t be based on partisan considerations,” said Jaitley in his speech while also highlighting that he was grateful to all the political parties for coming to a consensus on the matter.
Jaitley then went on to explain the GST Council.
“The Centre and the states will have to work together..the Centre will have a veto on the states and the states will have a veto on the Centre…therefore this will be federalism at play,” explained Jaitley.
He also said that once the bill is approved by the Parliament, it will have to be ratified by sates and only after that the GST Council will come into play.
“Subsequently three enabling laws, two by the Central Parliament and one by the state legislatures will have to be passed. The two central laws would be in relation to the central GST and the inter-state GST…The state legislation would be with regard to the state GST,” said Jaitley.
He conceded that the government had arrived at the consensus to do away with the additional 1 % tax on inter-state transactions. He also said the dispute addressal mechanism that the Opposition had a problem with, was rephrased. He then spoke about the two guiding principles that the government has come up with to decide the rate of taxation.
After initiating the discussion, the Finance Minister left to the House to debate it.
It’s been more than two years since the NDA government came to power in 2014 and GST is the biggest economic reform the government has been intending to undertake for the past few Parliament sessions.
The Constitution (One Hundred and Twenty-second Amendment) Bill, 2014 was passed by Lok Sabha in 2015 and later it was referred to the Select Committee of Rajya Sabha. The present bill considered by the house for passage is reported by the Select Committee.