Four key bills on GST get Lok Sabha green signal: Decks cleared for July rollout of uniform tax regime

Arun Jaitley, who steered the passage of the Bills, told the House that the GST will make commodities “slightly cheaper”

Written by Avishek G Dastidar | New Delhi | Updated: March 30, 2017 9:36 am
GST, GST bill, goods and services, lok sabha, GST 4 bills, narendra modi, pm modi, supplementary Bills, GST implementation, indian express news, india news, business news Finance Minister Jaitley at his office. (Source: Express Photo by Renuka Puri)

Clearing the decks for the July 1 rollout of the goods and services tax (GST) that will subsume all central and state taxes for a unified tax regime across the country, Lok Sabha Wednesday night showed the green light to four related crucial supplementary Bills. Finance Minister Arun Jaitley, who steered the passage of the Bills, told the House that the GST will make commodities “slightly cheaper” and rates would depend on whether the commodity is used by a rich person or a common man.

Hailing the historic move, Prime Minister Narendra Modi, who was present in Lok Sabha, tweeted in Hindi later: “Congratulations to all countrymen over passage of the GST Bill. New Year, New Law, New Bharat.” The Central GST Bill, 2017; The Integrated GST Bill, 2017; The GST (Compensation to States) Bill, 2017; and, The Union Territory GST Bill, 2017 were passed after voting down of a slew of amendments moved by Opposition parties.

Read | Lok Sabha passes GST supplementary bills; ‘history in making,’ says Arun Jaitley

During the seven-hour debate in the House, Opposition parties like the Congress, Trinamool Congress and BJD contested several clauses in the Bills such as the power of the GST Council to decide on laws that the states or the Centre would enact, why there was no one rate for all commodities instead of multiple rate slabs.

In his reply, Jaitley said GST rates will depend on whether the commodity is used by a rich person or a common man. “It is no one’s case to place items like baby food in the higher tax slab. Similarly, hawai chappal and a luxury car cannot have the same tax rates. That is something the GST council has decided with unanimity,” he said, adding that food items would will not attract any tax as they have been kept in the zero-tax slab. He said once the new regime is implemented, the harassment of businesses by different authorities would end and India would have one rate for one commodity throughout the country.

To Opposition criticism that the current GST law “abrogates” parliamentary sovereignty on taxation matters, Jaitley quoted Constitutional amendments and said the current arrangement is to make sure each state legislature does not enact its own tax law different from what is enshrined in the GST.

Read | GST debate: Who said what in Parliament today

“Including all states, Union Territories and the Centre, there are 32 entities in the Council. Now, once we have all agreed that there would be a GST, we cannot have a system which allows states to come out with their own tax laws different from the GST. That would be chaos,” he said.
Clarifying that he agreed in-principle to include real estate in the GST list, Jaitley said the Council — comprising Finance Ministers of Union and states — would take a call on this after the first year of the rollout.

Batting for the one-country-one-tax system, he said: “Today you have tax on tax, you have cascading effect. When all of that is removed, goods will become slightly cheaper.” The GST Council has recommended a four-tier tax structure — 5, 12, 18 and 28 per cent. On top of the highest slab, a cess will be imposed on luxury and demerit goods to compensate the states for revenue loss in the first five years of GST implementation.

However, the Central GST (CGST) law has pegged the peak rate at 20 per cent and a similar rate has been prescribed in the State GST (SGST) law, which takes the peak rate to 40 per cent which will come into force only during financial exigencies. Jaitley said the cess would be transient for a period of five years so that the proceeds can be utilised to compensate the states.

Outside Lok Sabha, the Congress criticised the government on the manner in which the GST Bills have been drafted. “It is a historic day where Parliament’s sovereignty has been removed insofar as taxation is concerned and they have no power to abrogate… This is again a big assault on the federal structure of the Constitution of India,” M Veerappa Moily, senior Congress leader, told reporters.

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First Published on: March 30, 2017 4:06 am
  1. I
    indian
    Mar 30, 2017 at 4:23 am
    It's high time
    Reply
    1. M
      Michellegt;Vedicgt;human
      Mar 29, 2017 at 11:14 pm
      NDA is the current and future DNA of Hindustan,---Jai hind.
      Reply
      1. S
        ss
        Mar 30, 2017 at 5:08 am
        One more brainless initiative from our great brainless FM.See the way he is overjo, don't know for what, and says GST will 'slightly' decrease the prices for poor. Definitely there will be chaos in July, vendors will loot in the name of GST , where there is no bill or receipt system in most of kirana shops, vendors will use this as a hance.lt;br/gt; I think these jokers need to be kicked out in 2019, no brains govt
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        1. A
          ak dev
          Mar 30, 2017 at 1:05 am
          Well done dear FM.
          Reply
          1. A
            AP
            Mar 30, 2017 at 4:02 am
            Cars also occupy a lot of space and contribute more to huge traffic in cities. If one can afford a car, they can also afford to pay taxes, parking fees and toll, that is nothing! Looking at the bigger picture, bicycle riders are actually doing a favor to the environment and to every other person on this planet, by not causing pollution and traffic problems. Coming to two wheelers, they too pay road taxes and parking fees. Most of the tolls are on highways, which are used by heavy vehicles and cars predominantly. Frankly I don't see anything wrong in rich and the elite paying some extra tax on "luxury goods", while the lower cles can get "goods of necessity" at a lower tax rate.
            Reply
            1. A
              ashok s
              Mar 30, 2017 at 12:25 am
              Still netizens are kept in dark about what commodity or services will be charged at what rate . it will come in surprise when July comes in. Government should ensure that all price n tax list is published categories vise in news n other print media . let's netizens have voice over it
              Reply
              1. T
                Tushar
                Mar 30, 2017 at 4:12 am
                In short squeezing from something what delivers most instead of makng those doesn't deliver efficient and tax paying. ..this s the reason the black money is created. ..for rich it's not an easy earning .he earned it with his hard work . ..
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                1. G
                  Gomathi Raghavan
                  Mar 30, 2017 at 3:17 am
                  jaitley has pla an important role in building new India it is our India vis new India
                  Reply
                  1. H
                    harun
                    Mar 30, 2017 at 2:29 am
                    Thats it ,this was the Only thing lacking in PM"s CV,With this he has not only transformed India but also laid the foundation for 25% GDP growth.lt;br/gt;lt;br/gt;PM must rework the Target of job creation of 1 cr a year to 3 cr a year,with the GDP Growth to be 25% from next fiscal with FDI at record high of 54 billion $.lt;br/gt;lt;br/gt;India is just not all about Beef/Chicken/Fish and Eggs for the Pressudes to talk about its GST/Digital India/Swach India and Start Up India.lt;br/gt;lt;br/gt;All this wailing about Beef/Chicken and Mutton Ban will not effect anyone.lt;br/gt;lt;br/gt;Skill India you can get trained for Free in whatever you want and through Start Up India become a small businessman.lt;br/gt;lt;br/gt;Anyway with the kind of diseases and the incidence bieng reported to ban beef or get the shops shut as SS and Hindu Vahini are doing isnt a bad idea
                    Reply
                    1. I
                      Ivan
                      Mar 30, 2017 at 12:53 pm
                      Why only 25% GDP growth?. With Modi gas we can aim for 110% annual growth!
                      Reply
                      1. G
                        George Cruz
                        Mar 30, 2017 at 1:44 am
                        This important GST bill will eliminate double taxation at the source and ultimately at the destination. Under the previous regimes the GST was taxed t the source, at the destination and when the greedy businessmen include their high profit margins the Indian consumers were paying the exuberant prices and were ripped off. Arun Jaitley, who steered the page of the Bills, told the House that the GST will make commodities “slightly cheaper” for every Indian citizen across India. Now the opposition parties and their leaders would claim that this GST scheme was their idea nad Jaitley just copied it.
                        Reply
                        1. K
                          KFC
                          Mar 30, 2017 at 2:16 am
                          3 years of non performance.
                          Reply
                          1. S
                            Sankaran Krishnan
                            Mar 30, 2017 at 3:19 am
                            It is good if the GST Bill is becomes Historic by byping the Parliament but it serves the interest of the common man and if tax rates are slashed and benefits the people let us welcome wheartedly and the so called Opposition Parties are exposed by themselves by their own forgetting that it is they who had introduced the GST but failed unity during their regime shows them very poorly !!!
                            Reply
                            1. L
                              L.S.S.LAL
                              Mar 30, 2017 at 6:29 am
                              Pl. know Impact of Indirect current tax structure Vs GST before making any comment. GST decision will impact in long run with higher GDP growth , higher investment , higher employment and higher transparency in taxation structure . There will be some transitional issues , which will be less today because of on line user base has increased with higher literacy rates .lt;br/gt;Had it been ped 10 yrs before , when internet user base was low with lesser speed , this could have back fired ? In my opinion , after creating awareness with appropriate Govt . support , implementation will be more smooth now. this will be game changer for Indian Economy.
                              Reply
                              1. M
                                Mahender Goriganti
                                Mar 30, 2017 at 1:54 am
                                Rich are most unitize-rs and beneficiary in any country and system. It is not penalizing them but making Rich, pay their share of cost of administration (, infrastructures, security, law and order) proportionately. Rich are most unitize-rs and beneficiary in any country and system. (US capitalism is an exception)
                                Reply
                                1. S
                                  statham
                                  Mar 30, 2017 at 4:38 am
                                  well said.
                                  Reply
                                  1. S
                                    subraman
                                    Mar 30, 2017 at 1:38 am
                                    Dear FM, why are you penalising the rich with cess when they are paying their taxes? Many worked hard for their riches, unlike Indian politicians who hardly work (except their mouths) and are the most corrupt in the country.
                                    Reply
                                    1. S
                                      subraman
                                      Mar 30, 2017 at 3:22 am
                                      They also contribute the most to development in the country. e.g. Cars pay road taxes,tolls and parking fees that is used for road construction/maintenance. Two-wheelers use the same roads but don't pay tolls/parking fees, etc. Bicycle riders don't even pay road tax.
                                      Reply
                                      1. A
                                        ASHOK
                                        Mar 30, 2017 at 9:43 am
                                        DEMONETISATION WAS FOLLOWED BY 60 PLUS CORRECTION NOTIFICATION.LETS WAIT AND SEE FOR GST
                                        Reply
                                        1. N
                                          Nagaraj
                                          Mar 30, 2017 at 4:02 am
                                          Hawai chappal Rs.100, if GST 10% then GST is Rs.10. BMW car Rs.75 lakhs, if same 10% GST, then GST is Rs.7.50 lakhs. Who is getting the point from finance minister, that ten rupees is mightier than seven and half lakhs of rupees!
                                          Reply
                                          1. R
                                            Raj V
                                            Mar 30, 2017 at 12:30 am
                                            There is a need to inform the plus of this bill in national media for the common man.
                                            Reply
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