“What is coming tomorrow in the Rajya Sabha is the Constitution Amendment Bill to enable the GST Bill to be taken up in the House”.
Advertisement
The CEA also recommended a concessional rate of 12 percent for public goods that concerns the deprived or weaker sections and a rate of 40 percent for luxury items and tobacco, aerated drinks and pan masala etc. Chidambaram, thus, hits the core point in his GST speech – the final GST rate at 18 percent, by invoking Subramanian’s CEA’s proposals, which the government can not ignore.
When questioned about this, people say we should not sacrifice the good for the best and so on. With the Congress’s demand of inclusion of GST rate in the constitution, rejected outright by the BJP and bigger regional parties like the RJD and the TMC, the rate might find place in the supporting legislation that will come up after the constitutional amendment.
The former finance minister’s remarks came after Jaitley moved what is called the Constitution (One Hundred and Twenty-Second Amendment) Bill, 2014, for passage and initiated a debate on the subject.
While GST may push up inflation in the short term because the price of some goods will rise, economists say it will boost business activity and deter tax evasion.
Yet the vote will only fire the starting gun in a legislative marathon in which the national parliament and India’s 29 federal states have to pass further laws determining the – still unknown – rate and scope of the tax.
A pledge to compensate states for lost revenues for five years means it may be some time before the central government feels any benefit.
The much awaited Goods and Services Tax (GST) Bill is all set to be approved by the Rajya Sabha today. Most of the recommendations made by the Empowered Committee and the Parliamentary Standing Committee were accepted and the draft Amendment Bill was suitably revised. The key Congress demand for rephrasing of the language for setting up of dispute resolution mechanism in the GST Council has also been agreed to by the government. According to Jain, the government will need to take in to account stakeholder comments, formation of the GST Council, evolving the GST Network (GSTN) which will form the IT backbone and to ensure that there is breathing room for industry to prepare for the transition.
Congress had been at loggerheads with the government for the past over a year on the GST bill on three counts-a cap on the rate in the Constitution Amendment bill, removal of one percent additional tax to be levied by manufacturing states and a Supreme Court judge-headed panel to resolve disputes in the new taxation regime. After parliament, the bill will then go to the states for approval.
MP Derek O’Brien of TMC noted that people were exhausted of the political “ping-pong” between Congress and BJP on the GST bill, and termed the tax “Girgit Samjhauta Tax”.
“Consequently, services are likely to become costlier, while goods become cheaper on implementation of the GST”, Nomura said.
Advertisement
Yesterday, the government appeared confident of getting the bill passed in the Upper House, where it is in minority, saying it was positive that all parties will support the bill.
