BackNarendra Modi has the votes to pass GST, says Arun Jaitley
GST could be rolled out anytime next year after it's approved, says finance minister Arun Jaitley
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New Delhi: Prime Minister Narendra Modi has the votes to win approval for a goods-and-services tax (GST) first proposed in 2006, according to finance minister Arunn Jaitley.
The tax, one of India’s biggest economic reforms in decades, could be rolled out anytime next year after it’s approved, Jaitley said in an interview with Bloomberg TV India. Modi’s opponents have blocked the measure in the Rajya Sabha.
“The day it is discussed and put to vote in Rajya Sabha I have not the least doubt that it will be approved," Jaitley said in the interview in Dubai on Monday evening. “We have numbers on our side."
The tax will be the main agenda item when parliament reconvenes next week. It’s aim is to whittle down more than a dozen state levies to create a single market among India’s 1.3 billion people for the first time.
While Modi’s defeat in recent Bihar state polls makes it more difficult for him to get control of the opposition-controlled upper house, Jaitley said it wouldn’t affect the passage of GST. As a consumer of goods, Bihar stands to benefit from the new destination tax, he said.
‘Hide and seek’
Jaitley blamed the main opposition party Congress for “playing hide and seek" over the GST vote. Modi’s position in the upper house, where members are appointed by state legislatures, will improve after April, Jaitley said.
Congress has blocked key elements of Modi’s economic agenda, including GST and a bill to make it easier to acquire land. Modi this month used executive powers to ease restrictions on foreign direct investment in 15 industries as he sought to lure investors and halt a stock sell-off that threatens to send the local currency to a record low.
India has set a deadline of 1 April 2016 for nationwide introduction of GST. If the current constitutional amendment allowing the measure is passed, it needs to be ratified by more than half of India’s states. Then parliament must pass another bill to implement the GST. The overall rate, which would vary for different goods, would be set by a newly formed GST Council.
“It’s a transaction tax which can get into operation as soon as the Constitution allows," Jaitley said. “Once it’s put to vote I have all the supporting legislation drafts ready." Bloomberg
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