New Delhi: Decks have been cleared for a pan-India implementation of the Goods and Services Tax (GST) from July 1 with the Rajya Sabha passing the much-awaited four enabling bills on Thursday.
The four bills — Central Goods and Services Tax (GST) Bill, Integrated GST Bill, Compensation GST Bill and Union Territory GST Bill 2017 — were passed by the Rajya Sabha and returned to Lok Sabha, after a discussion of almost nine hours spread across two days.
Replying to the debate on the four bills in the Rajya Sabha, Finance Minister Arun Jaitley said that the goods that are exempted from taxes currently will remain to be exempted once the GST is in place.
“Whatever goods are exempted from tax today, will remain exempted. The present status quo will continue,” he said.
Jaitley said that to make tax filing easier under the GST, the provision of quarterly returns is there in the new indirect tax regime.
Noting that both the central and state governments are pooling their sovereignty to have this tax regime, Jaitley noted that India, despite being one political entity, remained different economic entities with states having different taxes.
“In the concept of goods and services tax, both Centre and states simultaneously have the power to levy tax. GST is the only tax which is simultaneously levied by Centre and states,” he said.
Clarifying on the tax rate on petroleum products in the regime, Jaitley said that the Council has decided that the petroleum products though they have been included under GST, will remain zero rated as of now.
“The Council decided that we will take up the issue of petroleum products in a year after implementation of GST. Today, constitutionally petroleum products are under GST, but will be zero rated. So once Council decides it can be taxed under GST, we won’t need to amend the Constitution,” he said.
On demands of change in the structure of Goods and Services Tax Network (GSTN) that is creating the information technology (IT) backbone for the new indirect tax regime, Jaitley said that the shareholding pattern has been set after detailed discussions to ensure the flexibility of the company.
“Government can acquire 1-2 per cent more shares in GSTN, but not sure if the flexibility will remain. We have not felt the need of altering the arrangement. The management structure created has to face penal consequences if any information is leaked,” he said.
The Centre owns 24.5 per cent stake in GSTN, state governments own another 24.5 per cent, while the HDFC, NSE Strategic Investment Corporation, HDFC Bank and ICICI Bank own 10 per cent each.
LIC Finance holds 11 per cent stake in GSTN, according to the Registrar of Companies (RoC) filings, obtained by IANS from business research platform Tofler.
Discussing the Bills, most of the political parties favoured them but cautioned the government on all possible shortcomings the legislation may have.
Participating in the debate, Sharad Yadav of the Janata Dal-United said that “GST should be made easy, so people do not have any tax related problems”.
Praful Patel of the Nationalist Congress Party expressed apprehension over the proposed “harsh punishments” in the GST Bills, and said they should be done away with to create a good atmosphere for business.
“Every economic offence should not lead to jail,” he said.
The former minister also suggested that electricity and petroleum products should also come under the proposed legislation.
“If we are looking at one nation, one tax, than these issues should be looked into,” he said.
Sitaram Yechury of the Communist Party of India-Marxist said that the federal structure of the country must not be disturbed.
He expressed his unhappiness over the GST having been brought in the Rajya Sabha as a Finance Bill, saying that the government should not have treated it as a Finance Bill.
“Parliament cannot be ignored,” he said, suggesting that GST should be audited by the Comptroller and Auditor General (CAG).
Jairam Ramesh of the Congress and D. Raja of the CPI also supported Yechury on the issue of GST having been brought in the Rajya Sabha as Finance Bill, with Ramesh saying that “Rajya Sabha was being bypassed”.
“It should not have come to us as Finance Bill,” he said.
The Lok Sabha had already passed the Bills on March 29, 2017.
–IANS