The Rajya Sabha passed the Bill to amend the
Constitution paving the way for the roll-out of the Goods and Services
Tax (GST) on Wednesday evening by two-thirds majority, as all political
parties with the exception of the AIADMK pledged support.
The
amendments moved by Union Finance Minister Arun Jaitley were also put
to vote. The Bill will now be returned to the Lok Sabha for its
approval.
The Constitutional amendment will enable
both the Centre and the States to simultaneously levy the GST, which
will subsume all indirect taxes currently levied, including excise
duties and service tax. It will be levied on consumption rather than
production.
Two components
The
GST will have two components keeping in mind the federal structure of
the country: the Central GST (CGST) and the State GST (SGST). The shift
to the GST regime, one of the most significant tax reforms in recent
history, will lead to a uniform, seamless market across the country; it
will be a uniform rate, will check evasion, and boost growth rates, Mr.
Jaitley said, initiating the debate.
Earlier in the
day, lead speaker for the Congress, former Finance Minister P.
Chidambaram, made it clear that the main Opposition party will support
the long-pending Bill only if the government gave firm, categorical
assurances on two things: keeping the GST rate capped at 18 per cent in
the subsequent legislation needed for the GST’s roll-out and bringing
them in as financial Bills rather than money bills, which the Upper
House will not just discuss but also vote on. Members of nearly all the
political parties who spoke raised similar demands.
Mr.
Jaitley, while refusing to give an assurance, did give the House his
word that the government will go by the Constitutional provisions and
precedents at the time of bringing in the Bills. The Congress members
voted in favour of the Bill.
The Finance Minister
said his discussions with States led him to believe that the rates would
be moderate and less onerous than the combined burden of the Central
and State taxes on goods and services, which comes to about 27%.
However, he said it was not possible for him to give an assurance on
legislation that had not yet been drafted. Before the Bill was put to
vote, the AIADMK members staged a walkout from the House.
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