The government will not reconsider the July 1 roll-out date for GST, finance minister Arun Jaitley said on Tuesday, emphasising that the date was announced well in advance and so “nobody had any business not to be ready”.
Besides, additional time has been given in the initial period for filing of the results, thus giving enough time to prepare for the transition, Jaitley added.
Jaitley also announced that the government will bring in the Goods and Services Tax (GST) at the stroke of the midnight of June 30 with a grand function in the Central Hall of Parliament. The GST will be launched in presence of President Pranab Mukherjee during the function, which is being organised by the Parliamentary Affairs Ministry.
All parliamentarians, chief ministers, states’ finance ministers and former chairmen of empowered committee of state finance ministers have been invited for the function which is reminiscent of India’s Tryst with Destiny moment seen at the time of the country’s independence in 1947. Former prime ministers HD Deve Gowda and Manmohan Singh will be on dais apart from Vice-President Hamid Ansari and Lok Sabha Speaker Sumitra Mahajan.
“The official launch will take place in the presence of the President of India in Parliament’s central hall…There will be a brief function of about one hour, where the Prime Minister and the President will speak on the subject. Two short films on the subject of GST will be screened,” Jaitley said.
While stating that there will be short-term challenges from switchover to GST, Jaitley said over the medium and long term, the indirect tax regime will lead to a rise in revenues of the Centre and states as the size of the formal economy will grow. GST being a more efficient system will also result in better tax compliance, he said.
On the anti-profiteering clause in the GST law, he said the provision has been made as a deterrent which is not intended to be used unless forced to.
On the pending states which haven’t passed the SGST bill, Jaitley said apart from Kerala and Jammu & Kashmir, all the states have passed the state GST (SGST) law. Jaitley said that while Kerala will pass the SGST this week, the process was still on in J&K. He also said that traders and consumers in states which do not roll out GST from July 1 will suffer double taxation and losses. No compensation will be provided for the losses suffered, Jaitley added.
When asked whether GST Network can start functioning without having got clearance from home ministry, Jaitley said it’s a procedural matter.
“It (GSTN) is already functioning. These are all procedural matters, they go on,” he said, adding that it won’t defer the GST rollout. It won’t derail “the fate of Constitution amendment”, he said.
The home ministry has still not given security clearance to GSTN, which is a non-government, private limited company, incorporated on March 28, 2013. The government of India holds 24.5 per cent equity in GSTN and all states, including NCT of Delhi and Puducherry and the Empowered Committee of State Finance Ministers, together hold another 24.5 per cent. The balance 51 per cent equity is with non-government financial institutions — HDFC, HDFC Bank, ICICI Bank, NSE Strategic Investment Co and LIC Housing Finance Ltd.