Modi hailed the unanimity over the GST bill as a victory of the country's democratic principles and of all parties.
Modi hailed the unanimity over the GST bill as a victory of the country's democratic principles and of all parties.
New Delhi:
We have achieved freedom from tax terrorism, PM Modi said, speaking about the GST bill in the Lok Sabha on Monday.
MPs from both the Houses of Parliament have come together to take this momentous decision, he added. 90 political parties were unanimous in their support of the bill, the PM said.
The PM hailed the consensus that developed between different parties on the bill, and the trust between the centre and states on the issue.
-"This is a victory of the country's democratic principles. It is a victory for all political parties,-" Modi said hailing the GST bill.
The PM referred to GST as 'Great Step towards transformation', or 'Great Step towards transparency' in India.
Having been a Chief Minister, it became easier for him to address issues that CMs could have faced with the GST bill, Modi claimed.
Dismissing Congress leader Veerappa Moily's claim that the government was treating the Lok Sabha as the 'junior house', Modi said that he had met both Sonia Gandhi and Manmohan Singh - one a Lok Sabha MP and the other a Rajya Sabha MP, on the GST bill.
The Prime Minister said the passage of the GST bill will send across the message that 'consumer is king'. The consumer and small businesses will be benefited immensely by the GST, Modi said. Since there is interdependence between states, economy of underdeveloped states, especially in the North East, will also be boosted by the GST, he added.
Essential commodities used by the poor - which can cause consumer inflation - have been kept out of the ambit of GST, said the Prime Minister to universal applause from the benches.
Modi hoped that the GST will act as a catalyst to strengthen trust between the NDA government and states.
Attempting to overcome the objection that manufacturing-dominant states would be at a disadvantage due to GST, Modi said that though it was true the services-dominant states would benefit more, the government would compensate other states.
Stating that poverty in the country had remained high even after 70 years of independence, the Prime Minister said that the Goods and Services Tax would aid the government in achieving its aim of ''economical and educational empowerment of the poor'.
Comparing the GST to health insurance, Modi said, -"We say a lot about corruption but to eradicate corruption it is important to strengthen our system as well. The tax would force sellers to maintain legitimate bills for their transactions, thus avoiding misrepresentation. This would help fight the problem of black money in the country.-"
Another advantage of the GST is that there will be no 'human interface' between the tax payer and the collector. This will also reduce corruption, Modi claimed. He also highlighted that all data on the GST will be available online, thus enabling more transparency in the system.
Earlier in the day, Finance Minister Arun Jaitley said that majority of political parties have backed the legislation. -"Centre has addressed concerns of all states on GST,-" said Jaitley in Lok Sabha while moving the Constitution Amendment Bill.
-"GST will ensure one tax in the entire country. It will result in seamless transfer of goods and services in the country...This is a major indirect tax reform which will in long run will be in interest of the country,-" he said, adding Centre has addressed concerns of all the states.
As regards the issue of states giving up sovereign power to levy taxes, the minister said it is not the case, -"states and the Centre will be pooling in their sovereignty together and creating a new mechanism which will take all its decision within that pooled sovereignty.-"
Appreciating political parties for showing unanimity in passing the bill in the Upper House, he said, -"it is an important legislation and divided Parliament passing the country would not benefit the country.-"
The Minister further said the new tax regime will -"check leakages, increase tax base for centre and states, eliminate cascading effect of tax on tax, reduce tax evasion and improve ease of doing business.-"
Jaitley, while moving the amendments to the GST bill cleared last week by the Rajya Sabha, said the Constitutional Amendment Bill is an enabling law. After it is approved by the state assemblies, three more laws-- Central GST, Integrated GST and State GST-- will be drafted by the GST Council.
While the CGST and IGST will have to passed by Parliament, states will have to pass their SGST law. -"Simultaneously the GST Council will work on the functional modalities for implementation such that same person is not assessed by both Centre and states,-" Jaitley said.
He said it was the strength of the democracy that the states and opposition parties came on board for passage for the indirect tax reform bill. -"Majority of the political parties have come forward in support of the bill. Since it will be implemented by both the Centre and states, it was necessary to build a consensus on it,-" the Finance Minister said.
Responding, Congress leader Veerappa Moily said that the bill 'is not flawless, but has our support'. -"(It is) too early to say whether GST is a game-changer. Gains will depend on architecture, engineering, management aspects of the new levy,-" he added.
“If there was political consensus, this law would've come into force long ago. But this House is being treated like a junior party. The Rajya Sabha is given more importance. But we support the bill,” Moily said.
Warning of the challenges ahead, the Congress leader indicated that the stakeholders' reaction to the bill has to be carefully tackled by the GST Council. He said the Council would also have to allay the concerns of states and Union Territories.
GST, the biggest economic reform since 1991, is likely to sail through smoothly in the Lower House. It will replace a raft of different state and local taxes with a single unified value added tax system to turn the country into world's biggest single market.
The Bill was passed by Lok Sabha last year and now it has to go back to the Lower House for incorporating the amendments approved by Rajya Sabha.
The GST Bill has to be ratified by at least 16 states in 30 days after it is passed by Parliament.
After facing fierce opposition over the Bill for almost a year, the government succeeded in bringing all major opposition parties, including Congress, on board and it was passed in the Upper House with an overwhelming majority on August 3.
The Constitution (122nd Amendment) Bill, 2014, that would lay the ground for roll out of GST regime, was passed by the opposition-dominated Upper House after the government moved four amendments.
Once implemented, GST will subsume various taxes, including excise, services tax, octroi and other levies, and the proceeds will be shared between the Centre and the states.
Under the new GST regime goods would be taxed at the point of consumption, instead of the goods being taxed multiple times at different rates.
The GST, which was first proposed a decade back, is seen as potentially transformative for India's economy, adding as much as 2 percentage points to the GDP while also improving the ease of doing business and encourage investment in manufacturing. It is also expected to result in greater tax compliance, boosting government revenues.
