The Narendra Modi-led National Democratic Alliance (NDA) government has reportedly called a consultation meeting with states next week to discuss various contentious issues in the proposed goods and services tax (GST), along with the draft reports on business processes on GST registration, refunds and payment.
The meeting is also likely to take up the eight-point dissent given by the Congress members of the Parliamentary Standing Committee, which had submitted its report on the Bill in May, reports the Indian Express.
The Constitution (122 Amendment) Bill 2014 will empower Parliament and state legislatures to frame laws for the imposition of a goods and services tax. The Bill is pending passage in the Rajya Sabha, where the Modi government does not enjoy a majority. The government has to offset the gap in the Upper House, where the UPA’s 106 votes vastly outstrip the NDA’s 63. The passage of the Bill is vital for implementing the new indirect tax regime as it empowers the Centre to levy tax on goods beyond factory gate while it empowers states to charge service tax.
Economists have argued in favour of the GST, claiming it would not only smoothen the movement of goods and services across the states but also increase the size of the economy by as much as two per cent.
Finance minister Arun Jaitley has said the GST rate will not be as high as 26-27 per cent as demanded by some states but around 18 per cent as recommended by the Finance Commission.
The Congress had opposed the reform persistently during the Monsoon session and did not show any sign of easing up, forcing the government to finally prorogue the session, which it had kept in abeyance.
Implemented in over 140 countries, the rationale behind the switchover to the GST is that it is a simplified indirect tax regime with a single tax instead of multiple duties, thereby widening the tax base, improving compliance and plugging leakages.
The government is pinning hopes on the upcoming Winter session to get the GST Bill passed. This will be the last opportunity for the government to meet an April 2016 deadline to implement a reform that foreign and domestic companies consider one of the best ways to spur growth.
The Joint Committee on Business Process for GST in relation to GST Return has suggested filing of a periodic e-return for Central GST, State GST and Integrated GST.