Lok Sabha clears GST, Modi calls it a ‘victory’ for all

The long-delayed Constitution Amendment Bill on GST cleared Parliament on Monday evening with the Lok Sabha approving the version passed in the Upper House last week, marking a historic step for tax reform in India, that Prime Minister Narendra Modi said was “crucial” for ending tax terrorism, reducing corruption and black money, and making the consumer “king”.

The Constitution (122nd Amendment) Bill, passed by the Lok Sabha in May 2015, was taken up again by the Lower House to approve the changes made by the Rajya Sabha. The government had moved six official amendments, including scrapping of one per cent additional tax, to the bill cleared by the Upper House.

After a six-hour debate, the Lower House passed the bill with all 443 members present voting in favour after AIADMK members staged a walkout in protest.

Intervening in the Lok Sabha debate, Prime Minister Modi “humbly” thanked all parties for supporting GST, and said it reflected the “maturity” of Indian democracy as such a crucial law was approved with a consensus than on the basis of numbers.

Mr Modi, who was under attack by the Opposition, particularly the Congress, for being absent when the bill was cleared in the Rajya Sabha, said its passage was a “victory of democracy” and a “great step by Team India” that will help transform the economy, bring in transparency and usher in a system of “one country, one tax”.

Finance minister Arun Jaitley, replying to the debate, said the tax rate under the GST regime will be kept at the “minimum workable rate” as no state government could annoy its people with a higher rate. He said the rate will be fixed by the GST Council. However, he virtually ruled out any assurance that the GST Bill will not be brought as money bill, a key Congress demand.

While intervening in the debate, the Prime Minister was at his rhetorical best while describing GST, and underplaying the victory in Parliament, said passage of the GST Bill “should not be seen as a victory of a party or government, it is a win for the democratic ethos of India, and a victory for everyone”. Thanking all parties for their cooperation, he said “rashtraneeti is bigger than rajneeti”. For him, the GST’s mantra was “ek manch, marg, ek mat, ek manzil (one platform, one road, one opinion and one destination).” Saying the government wanted to bring in uniformity in taxes with GST, the PM said, amid thumping of desks: “The message is clear: the consumer is king.” The government, he said, had always stressed that GST was important to strengthen the country’s federal structure. “Faith is very important to strengthen the federal structure of India. GST will act as a catalyst in this regard,” Mr Modi said. “Today’s is an important move to free the nation from tax terrorism.”

The PM said he had never been in favour of passing this law or any other crucial legislation by the strength of numbers alone. “We want unanimity in passing crucial legislation, not pass them by majority strength.” He told the House: “Loktantra (democracy) is not just a game of mandate, it’s also a journey of forming a consensus.” The PM said he had called “Sonia Gandhiji and Manmohan Singhji to talk about the GST Bill. We have always tried to discuss this with everyone.”

Amid laughter he gave the example of Lord Krishna while talking about the “birth” of GST. “Janam koi deta hain, palta koi hain (Someone gives birth, someone else nurtures),” he said.

Saying the states were not self-sufficient but were inter-dependent, the PM felt GST “will boost the economy of underdeveloped states”. For the critics of GST, the PM reminded the House that most “things that can impact consumer inflation have been kept out of the ambit of GST”. He said while the cost of tax collection would come down, “the money can be used for the welfare of the poor”. He claimed GST “will curb corruption and black money”, adding: “We speak a lot about corruption, but we also need to build a strong anti-corruption system.”

Reminding the House that as (Gujarat) chief minister, he too had once been sceptical about GST, Mr Modi said: “Having been a CM, now it became easier for me to address issues that CMs could faced with GST.”

The PM said that in the 100 weeks that his government had been in power, “in this House we have passed more than 100 bills”.