‘Will help growth, cost cut of goods and services'
New Delhi, August 3: With the Opposition Congress and most other parties on board, Rajya Sabha on Wednesday night passed a Bill to amend the Constitution to facilitate rollout of the historic GST amid government's assurance that the tax rates would be kept “as low as possible”.
The Constitution (122nd Amendment) Bill, 2014, was approved by the Upper House with 203 votes in favour and none against, after a seven-hour debate during which a rare bonhomie was witnessed among the ruling and the opposition parties.
Six official amendments, including scrapping of 1 per cent additional tax, moved by the government were approved with cent per cent votes.
The Bill was passed by the Lok Sabha earlier.
It will now go back to the Lower House to incorporate the amendments approved by the Rajya Sabha. The Bill will also have to be approved by 50 per cent of all the state assemblies.
AIADMK was the only party to oppose the measure and its members staged a walkout from the House to register their unhappiness over the Bill which lays the ground for rollout of uniform Goods and Services Tax (GST) regime that will subsume all indirect taxes including central excise duty and state VAT/sales tax.
Describing the passage of GST Constitution Amendment Bill as a truly historic occasion, Prime Minister Narendra Modi thanked leaders and members of all parties.
“GST will be the best example of cooperative federalism. Together we will take India to new heights of progress,” Modi said.
The easy passage was facilitated after the main Opposition party Congress, which had been stalling the measure for over two years, came on board after the government made about six changes in the Bill, including scrapping of 1 per cent manufacturing tax and incorporate clearer provisions for compensating states for revenue loss for five years.
Replying to the debate during which most parties pressed for a Constitutional cap on GST tax rate at 18 per cent, Finance Minister Arun Jaitley said the guiding principle would be to keep the “rates as low as possible, certainly lower than what it is today.”
India Inc hails passage of GST Bill
Cheering the passage of the GST Bill in Rajya Sabha, India Inc said roll out of the much-awaited indirect tax reform will contribute significantly to the growth of the economy and bring down the overall cost of goods and services.
Terming GST as the “biggest reform in the field of taxes in the country”, CII Director General Chandrajit Banerjee said: “GST is expected to remove the cascading effects of various multi-level indirect taxes on goods and services and will subsume most of the country's central and state level duties and taxes, thus making the country a national market.
“GST will bring in much needed transparency and higher investments in the coming years and we hope that a few percentage points to India's GDP will be added through higher tax revenue and investments”.
Assocham president Sunil Kanoria termed it as a milestone in India's economic reforms after the 1991 reforms.
He, however, said the biggest challenge is to make it people-friendly.
“We have to ensure that the overall tax rates do not go up, they should rather come down so that GST gets approval of the people,” Kanoria said.
“The cooperation extended by the Opposition to this crucial legislation is the cornerstone of democracy and gives industry a lot of hope on progress of reforms in the country,” Ficci president Harshvardhan Neotia said.
Anshuman Magazine, Chairman, CBRE – India and South East Asia, termed it as a “major tax reform for our economy, which will transform India into a single market”.
He said the roll out of the indirect tax reform is likely to positively impact the real estate sector.
“GST will facilitate Make in India by making India a unified market, improve competitiveness of Indian businesses and help bring down the prices of goods for consumers by doing away with cascading levels of taxation. In the long run, it will also enhance government revenue,” Harsh Pati Singhania, Director JK Organisation said.
