PM rues RS not passing GST, says states would have benefited

New Delhi, May 13: As Parliament session ended without passing the landmark GST bill, Prime Minister Narendra Modi today rued the Rajya Sabha not approving the biggest indirect tax reform measure since independence, saying states stood to benefit the most from it.

The Prime Minister, who spoke in the Upper House as it bid farewell to 53 retiring MPs, noted that Rajya Sabha members are representatives of the states and the interest of their state should be a priority for them.

While important reform measures were passed, "it would have been better if two critical decisions had also been approved," he said, referring to Goods and Services Tax (GST) Bill and Compensatory Afforestation Fund Management and Planning Authority (CAMPA).

"Bihar would benefit from GST, Uttar Pradesh would benefit from GST. Barring one or two states, all states would have benefited from GST," he said.

Goods and Services Tax, which is to subsume all indirect taxes like excise duty and service tax into a single GST rate, was to be implemented from April 1, 2016 but opposition from Congress over key clauses including cap on the tax rate had stalled its passage in the Upper House.

Lok Sabha has already approved the constitutional amendment but it remains pending in Rajya Sabha, where the ruling NDA does not have a majority. Modi said the second crucial legislation was the one to create CAMPA.

"States would have got Rs 42,000 crore if we had decided on the legislation," he said, adding each state would have got Rs 2000-3000 crore.

The bill seeks to establish the national compensatory afforestation fund to promote afforestation and regeneration activities as way of compensating forest land diverted to non-forest uses.

"This (Rs 2000-3000 crore) is not a small amount," he said, adding availability of the funds before the beginning of the monsoon season would have greatly benefited the states. "We will have to wait for 4-5 months now," he said, ruing that the move beneficial to states has been left out.

PTI