The Congress has dropped its demand for specifying a cap on the GST rate in the Constitution and has settled for the cap being specified in the central GST and Integrated Goods and Services Tax (IGST) Bill.
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Later, a buoyant finance minister walked up to the Leader of the Opposition in the Rajya Sabha Ghulam Nabi Azad and former finance minister P Chidambaram and thanked them for their support to a legislation which could see the light of the day 13 years after it was first mooted.
The US India Business Council hastermed the passage of GST bill by the Indian Parliament as a “game-changer”, saying it is a significant milestone in efforts to improve the country’s ranking in World Bank’s ease of doing business index.
Jaitley said members will have an opportunity to speak on subjects when the supporting GST Bill comes up in November. “Because of efficiency gains and prevention of leakages, the overall tax burden on most commodities will come down, which will benefit consumers”, the Finance Ministry said in a set of FAQs on GST.
But, while on the face of it, conciliation seemed to be the mood of the House, Chidambaram did indicate that, even if the bill is passed by the Rajya Sabha, the GST debate will just get postponed, not settled.
The bill now returns to the lower house to incorporate the upper house amendments approved Wednesday.
“This reform will promote @makeinindia, help exports & thus boost employment while providing enhanced revenue”, said the Prime Minister.
Amid hectic discussions in Congress benches, Jairam said, “There is no guarantee that he will declare it as money bills in November session”.
Nasscom President R. Chandrasekhar told reporters here that while they welcome the GST which will unify the country as one tax regime, they hope that the government will address their concerns.
A Navneethakrishnan of AIADMK said GST will hurt many state revenues, particularly manufacturing-heavy states.
“My party will support the bill to make it a legislation”. Instead, it is suggesting an option in the form of band rates to protect the revenue of the Centre and states and as well to preserve the sanctity of the revenue neutral rate (RNR).
While the GST may increase inflation in the short term because the price of some goods will rise, economists say it will boost business activity and deter tax evasion.
The GST will replace more than a dozen levies central and state levies, including central excise duty, service tax and central sales tax as well as VAT on sale of goods and entry tax, to make movement of goods seamless across 1.3 billion market.
Under the new system, the states and the Centre will collect identical rates of taxes on goods and services.
In the long run it is expected to benefit consumers, who now pay different prices for goods in different states.
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GST will have a far reaching impact on nearly all the aspects of the business operations in the country, for instance, pricing of products and services; supply chain optimization; IT, accounting and tax compliance systems, it said.
