GST rate to be moderate, bill likely in monsoon session: Arun Jaitley


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.

“The government has promised not to change any law halfway,” he said. The Centre is also nudging the states to make it easier to do business in the country. Jaitley said India is now the fastest-growing major economy in the world. Its GDP expanded 7.9% in the fourth quarter of 2015-16 and 7.6% in the whole of 2015-16, the government said on May 31. “When the world grows at a faster pace on the strength of the tailwinds that the global economy provides, many economies grow.

But when the global environment is unsupportive and at times obstructive, when shrinkage of trade is taking place – that is the real test because they say when the going is good, everybody is at its best. When the going is challenging, then, to defy the odds and counter the trends is a real challenge. India has received the distinction of being the fastest-growing economy in the last two years, when global growth was slow,” he said.


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