Finance Minister Arun Jaitley on Thursday said that the first move towards a landmark GST was made by the Atal Bihari Vajpayee government, and not a Congress one. Speaking at a rally organised by the BJP’s Delhi unit, he said the Vajpayee government in 2003 constituted a task force, which submitted a report, stating that central and state levies should be merged into a goods and services tax (GST).
Jaitley said the incoming Congress government in 2004 saw merit in the argument and mooted the report. The then finance minister P Chidambaram in 2006 spoke of GST and set 2010 as a deadline to rollout the indirect tax regime, Jaitley said, adding that Chidambaram could not implement the plan.
Further, he said the UPA government could not get all the states onboard because they were unable to resolve how to compensate losses to manufacturing states arising because of GST being a destination-based tax. However, Jaitley said, Prime Minister Narendra Modi was clear from day one that India has to be a unified economically and devised not just a compensation formula, which was put in the Constitution Amendment Bill, but also got all the 29 states and six union territories on board.
Taking a dig at the Congress, he said the GST was in the party’s manifestos but it went back and forth, unsure if implementing the tax regime would pay off. They felt that if GST clicks, they will say they were part of the process that led to the new regime, and if it fails, the government could be blamed, he said.