For this 2016 version of the bill, Union finance minister Jaitley held several rounds of consultations with opposition parties and state governments.
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He said, the reform will promote Make in India, help exports and boost employment while providing enhanced revenue.
Yechury also quoted B R Ambedkar from the debates in the constituent assembly and said he concluded that the right for levying goods taxes should be with the provinces so that they have a source of revenue. “India becomes a big market, there will be a seamless transfer of goods and services across the country”, he said.
Businesses have lobbied hard for the tax, with business lobby the Confederation of Indian Industry (CII) estimating the GST will add 1.5 to 2 percentage points to the annual economic growth rate.
Mr. Parveen Jain, President, National Real Estate Development Council (NAREDCO), said, “The passing of the much awaited GST Bill in this Monsoon Session has spread happiness among the real estate community because of the benefits it will offer to the sector”.
The GST bill will cover taxes like central excise duty, state-level taxes like, VAT or sales tax, entertainment tax, entry tax, purchase tax, luxury tax and octroi. In the single-tax regime, MSMEs must be benefitted. “Hope the finance minister will pass GST bill not on strength of numbers but in strength of his arguments”, he added.
NASSCOM has already made suggestions to the Center to address the concerns of IT services providers in the model GST law, which is likely to come up in two to three months.
The legislation was approved by the Lok Sabha in May 2015 and tabled in the Rajya Sabha in August previous year where it has been stuck due to opposition from the Congress over certain provisions.
The government today proposed six official amendments to the 2014 bill. Panel also recommended eliminating all taxes on inter-state trade, including 1 per cent additional tax proposed in the GST Bill. “There were too many flaws that could be fixed”.
The Goods and Services Tax will replace a confusing jumble of central and state levies to create a common market across India for the first time. Because the GST bill included a constitutional amendment, it required a two-thirds majority in both houses to pass.
Once passed, the GST is expected to be the most significant tax reform since Independence. But it looks ambitious; the earliest the GST will kick in will be in July, say experts. “One nation, one tax regime will start”, said Deshpande.
It subsumes India’s messy plethora of indirect taxes, duties and surcharges into a single tax.
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“Even if we don’t want, we are supporting this bill so that a message doesn’t go that Samajwadi Party is becoming an obstacle towards economic progress of the country”, Agrawal said. Members of AIADMK, the ruling party in Tamil Nadu state, abstained from voting and staged a walkout in protest at the bill.
