OSAKA, JAPAN: India will attempt to keep the proposed Goods & Services Tax ( GST ) rate as moderate as possible and the government will push for passage of the bill introducing the levy in the upcoming monsoon session of Parliament, finance minister Arun Jaitley said.
The GST will replace various indirect taxes with one simple tax , creating a boundary-less national market that some estimate will lift India’s GDP by as much as 2%. According to the Constitution (122nd Amendment) Bill, the GST Council consisting of finance minister, minister of state for revenue and state finance ministers will recommend the tax rate.
“At what rate the GST Council will start it, I don’t know…there have been recommendations which have been made by expert committees, including the one that the ministry of finance had set up. I’m sure we will try to keep rates as moderate as possible,” Jaitley told Japanese investors at a Make in India seminar organised by the Department of Industrial Policy & Promotion and the Confederation of Indian Industry.
The finance minister, who is on a six-day visit to Japan, said he intended to bring the Constitution amendment bill for GST for consideration of the Upper House in the monsoon session of Parliament, which starts next month.
The government’s bid to get the GST bill passed in Parliament has been hampered by the lack of a majority in the Upper House. The opposition Congress party has stalled proceedings in the house and has stipulated three conditions, including capping GST rate at 18% in the Constitution amendment bill and scrapping a 1% additional tax on inter-state sales to compensate manufacturing states.
“…am reasonably hopeful of this being passed. The numbers are overwhelmingly in favour of GST…After he Constitution amendment is approved, there are three legislations that are required to be passed, two by the Central government and one by state assemblies,” Jaitley said.
The IT backbone required for implementing GST has made significant headway. The system will provide a standard interface for the taxpayer, including registration, filing of returns and payment of tax, and a shared IT infrastructure between the Centre, the states and other bodies like RBI . Pitching India as an attractive investment destination, Jaitley said the government had undertaken several reforms and the pipeline remains robust with measures.
“India has a huge pipeline of reforms left to be implemented over the next few years,” Jaitley said, adding that the country is well poised to post better growth on the back of an above-normal monsoon predicted for this year. He said the government had made it easier to do business in the country and brought about predictability in policy.