August 3, 2016 1:19:14 pm
Rajya Sabha is all set to discuss the GST bill on Wednesday, nine years after it was first proposed. The NDA government led by Prime Minister Narendra Modi, after a lot of persuasion, managed to gain support of Opposition parties including Congress which had demanded three changes to be made to the bill.
The bill was passed by Lok Sabha in 2015 but could not pass the test in Rajya Sabha where ruling BJP does not have a majority. The discussion on GST in Upper House is scheduled to start at 2 pm during the ongoing Monsoon session which will end on August 12.
Reportedly, the NDA government and Finance Minister Arun Jaitley are targeting April 1 as the launch date of GST. The government went forward and approached the Opposition party leaders before the start of Monsoon session asking for their support to pass the bill. The Congress party, which was leading the protest in Parliament, had demanded some changes including quashing of 1 per cent additional tax and mandatory compensation to states for revenue loss.
The government agreed upon nine changes and Members of Parliament were notified about it. Now, if the bill is passed in Rajya Sabha, it will have to be sent back to Lok Sabha because of the changes made to the bill by the Cabinet.
Here are top stories to read about GST:
In a full non-GST system, there is a cascading burden of “tax on tax”, as there are no set-offs for taxes paid on inputs or on previous purchases. Currently, we have Value-Added Tax (VAT) systems both at the central and state levels. But the central VAT or CENVAT mechanism extends tax set-offs only against central excise duty and service tax paid up to the level of production.
Sources said some senior Congress members of Lok Sabha said they were not kept in the loop on the GST decision. Members wanted to know that if the party had to finally support GST, why did it keep opposing it for two years, sources said
In the Constituent Assembly debates, maintaining his position that the States (then provinces) have the right to collect Sales Tax according to their necessities, B R Ambedkar even opposed an amendment to put a ceiling on the Sales Tax to be levied by provinces.
At a time when Europe is threatening to break up and the US seems deeply divided, the GST reform bill would deepen and strengthen the unity of our country. Finally, at a time when people are wary of too much concentration of power, GST achieves uniformity without giving up the power of States. The revenue earned from GST is shared between the Center and the States.
GST was initially proposed by the Congress party in one of Finance Minister P Chidambaram’s Budget speeches. Thereafter, Mr Pranab Mukherjee introduced the Bill. They could not build consensus among the states. With some changes in the law, we (BJP) have been able to bring about a consensus among the states. The interview, which you can read here, is part of an Indian Express Series on 25 years of economic reforms.
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