GST Bill debate in LS: Key highlights

The CGST Bill will enable collection of tax on inter-state supply of goods and services or both by the union government.

New Delhi, March 29: Finance Minister Arun Jaitley on Wednesday moved four GST Bills for the consideration in the Lok Sabha for the passage.

The CGST Bill will enable collection of tax on inter-state supply of goods and services or both by the union government. The integrated GST Bill 2017 provides for the levy and collection of tax on inter-state supply.

The GST Compensation to States Bill is to provide compensation to the states for the loss of revenue that will arise on account of implementation of the GST. Arun Jaitley began the argument first for the reform and he said that revolutionary bills will benefit all. He added that four GST Bills; Central GST, State GST, Integrated GST and Union Territory GST laws; are taken together because the matter of the bills is the same.

He added that there will be four tax rates with the highest being 28 percent but luxury products and tobacco products will attract more GST. He also informed Lok Sabha that extra GST will be considered as compensation cess and it will go to compensation fund of states which suffer losses.

Veerappa Moily began the reply for Congress by saying that there are several sections for which no groups were created in GST Bill. He also talked about there being no clarity regarding various special regions including SEZs.

Moily also pointed that GST's anti-profiteering laws are draconian. He felt the GST will increase paper work when goods move inter-state.

"Intention may be good but this will land the country in complete tax distortion," he said. Moily said there was no clarity how the tax benefits will be availed by the common people. He said the GST legislation was an example of how the government is pursuing a 'chalta hai' (casual) attitude as there was not enough provision to protect the common people.

Participating in the debate, BJP member Udit Raj said the GST would bring about uniformity in the tax system and be immensely beneficial to the 1.2 billion people of the country. The BJP MP dismissed the suggestion that with the implementation of GST, the powers of the state legislatures to enact tax laws will be completely abrogated, saying the legislation was prepared only with the consent of all state governments.

He said the Centre will not dictate the GST Council but will act as buffer between the central and state governments. Raj said GST implementation will automatically encourage digitisation, bring in transparency and lower the prices and the hoarding of essential commodities, besides curbing black money.

"The GST is a game changer. It will lead to a corruption-free India," he said. He also tried to counter Moily's argument that the delay in implementation of GST led to the loss of Rs 12 lakh crore and saying that the earlier Opposition was responsible for delaying implementation of the legislation.

AIADMK member Venkatesh Babu termed the GST as the biggest tax reform initiative post independence but said there were many challenges in its proper implementation. He said Tamil Nadu, being one of the manufacturing states, had initially opposed the GST Bill but it was happy that some of the concerns of the state were addressed. "There will be huge revenue loss to manufacturing states like Tamil Nadu. Some of our concerns were addressed while some are yet to be addressed," he said. The AIADMK MP, however said, "the Tamil Nadu government is fully committed for successful implementation of GST".

TMC member Kalyan Banerjee said the West Bengal government led by Mamata Banerjee has in-principle supported the "path-breaking" GST legislation but expressed concern over the government's hurry in its implementation. He said the GST will bring a single tax structure for the common people and small traders and it was West Bengal which ensured that no state government suffers financially due to the implementation of GST. He also suggested that the government should look into the GST models of other nations so that the legislation is implemented properly. Otherwise, the initiative may fail.

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