New Delhi: The contentious Goods and Services Tax (GST) Constitutional Amendment Bill, one of the most ambitious tax reforms in India, became a reality on Wednesday, as the bill broke an almost decade long jinx and sailed past the Rajya Sabha hurdle.
The Rajya Sabha witnessed a seven-hour long fierce debate over the contentious Bill, with Finance Minister Arun Jaitley assuring parties that Centre will work with the states and address their concerns over the Bill.
Responding to former finance minister Chidambaram's demand that the GST rate be capped at 18 per cent, Jaitley said that his government would "try for the most reasonable rate."
Following is the timeline of what happened in Rajya Sabha:
8:50 pm: “Happy that the Finance Minister said that the rates will be moderated, I was also encouraged when he said both Houses will have the opportunity to discuss it," said P Chidambaram.
"There is no reason to believe that the Opposition will scuttle any reasonable, responsible bill. Please give us a categorical assurance, that when the CGST bill and IGST Bill are brought in the house, you will bring it as a financial bill and this house will discuss the matter," he added.
8:45 pm: AIADMK members staged a walkout in protest of the Bill saying that their concerns were not addressed by the government.
8:30 pm: Jaitley spoke in the Rajya Sabha once again to clarify all the doubts and apprehensions expressed by various parties over the GST bill. “It is half truth if you say Centre has a veto on states, states also have a veto on the state. Both Centre and states are compelled to work with each other,” Jaitley said.
Following are highlights from his speech -
- With GST, system will become more efficient, there will be no tax on tax, evasion will become more difficult.
- Chidambaram made a valid point, he said the system will be more efficient, it will be more compliant, avoidance will become difficult because you will be detected at some stage or the other.
- There will be no cascading effect of tax on tax.
- We will try for the most reasonable rate for GST. We gave a band of 17 to 19%. It's good if we maintain 18% cap.
7:30 pm: “We don’t want the burden on people of the nation to increase. Indirect tax must go down. We were not opposing GST on political grounds, we wanted GST, but we wanted our concerns to be addressed,” said Congress leader Anand Sharma
6:11 pm: "We consider it as a gamechanging reform for the Indian economy which will develop common markets and reduce cascading effect of taxes, therefore we support the Bill," said Vijaysai Reddy, YSR Congress MP.
The party also requested Arun Jaitley to grant special category status to Andhra Pradesh for it to avail the special provisions listed in the GST Bill.
Read: Cap GST rate at 18 per cent, insists Congress
5:15 pm: Congress MP Vivek Tankha says the apprehension expressed by his party over the Bill are ‘real fears’. “Ask any country and they will tell you, that the first few years of the GST are very difficult and the teething troubles are immense,” he said, claiming that the provisions in the bill were ‘draconian’.
4:45 pm: TDP leader CM Ramesh said Andhra Pradesh would benefit from the GST bill. “Our state is number 2 in ease of doing business, we want to become number one. Even though our state will suffer some setback, it will help the GDP of the country and that is why were supporting the Bill.”
4:15 pm: Communist Party of India leader Sitaram Yechury expressed his apprehensions in the Rajya Sabha while speaking on the much publicised legislation on tax reforms. He said GST could impact the federal structure of the Constitution. He added that direct tax revenues in country among lowest in the world.
3:50 pm: Veteran parliamentarian and Janata Dal United leader Sharad Yadav said he supports government's step (GST Bill) towards achieving a tax reform.
3:45 pm: Trinamaool Congress leader Derik O'brien said during the debate that supporting the GS tax initiative has been his party's manifesto. He also said the GST bill should be renamed as 'Girgit Samajhauta Tax'.
3:14 pm: Naresh Agrawal of the Samajwadi Party while taking part in the debate said that his party is supporting the GST tax reform as it (SP) does not want to be seen as an anti-development party.
He went on to say that the Bill is not what the Select Committee had initially taken up. Agarwal raised the question what mechanism government is going to put in place to resolve disputes between the Centre and the states.
2:51 pm: The former finance minister also emphasised that GST Council should set up a separate Disputes Resolution Authority so that complaints (from the states), if any, can be sorted out in time.
2:40 pm: Claiming that every finance minister, during their tenure, would want to increase revenues, Chidamabram said, “GST doesn’t stand only for Goods & Services Tax, it also stands for 'Good Sense Triumphs'.”
2:20 pm: Addressing the Parliament on the GST debate, ex-finance minister P Chidambaram maintained that the Congress party was never opposed to the idea of GST Bill. "Congress was never opposed to the idea of a GST. The idea was not opposed but the bill was opposed. It was felt that a better bill was possible," Chidambaram said.
2:02 pm: Tabling the much awaited GST Bill in the Upper House, Finance Minister Arun Jaitley said that there has been major consensus building that has gone into tabling the Bill and that a reform like the GST cannot be passed on partisan consensus. “GST will convert India into one economic market with one uniform tax rate. It will enable seamless transfer of goods across the country. Extremely thankful to all Opposition parties especially LoP GN Azad,” Jaitley 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.
"It is very much in the category of what one would call a big-bang reform," CII president Naushad Forbes said.
"It will be a huge benefit to ease of doing business, it's a huge potential efficiency gainer. It's a very significant potential contribution to the economy in the longer term," he said.
India is already the world's fastest growing large economy, expanding by 7.9 percent year-on-year in the March quarter. Economists at HSBC forecast the GST would produce a boost of 0.8 percentage points within three to five years.
