Arun Jaitley moves GST bill in Lok Sabha2 min read . Updated: 25 Apr 2015, 12:12 AM IST
Jaitley moves constitution amendment bill for the implementation of GST for discussion and passage in Lok Sabha amid a walkout from Congress members
New Delhi: Finance minister Arun Jaitley on Friday moved the constitution amendment bill for the implementation of the goods and services tax (GST) for discussion and passage in the Lok Sabha amid uncertainty about the bill’s fate.
While most of the opposition parties wanted the bill to be sent to the standing committee for finance, the government stood firm. The Congress staged a walkout from the Lok Sabha over this issue.
If the bill fails to pass through both the houses of Parliament in the budget session, it could derail GST implementation, which is set for roll out from 1 April 2016.
Senior government leaders are worried about the bill’s fate in the upper house where the ruling National Democratic Alliance (NDA) is in minority. “The government is mulling at the possibility of sending the bill to a select committee because we realize that the government doesn’t have the required numbers in Rajya Sabha and it will be difficult for the bill to get passed," said a senior leader of the NDA who is aware of the government’s strategy.
The opposition parties, including the Congress, All India Anna Dravida Munnetra Kazhagam, Biju Janata Dal and Trinamool Congress argue that since the government has introduced changes in the bill, it should be sent back to the standing committee.
“There is a practice to send a bill to standing committee for discussion but if the government wants to use the force of its numbers to do away with parliamentary systems then it can go ahead," said a member of Parliament from an opposition party who didn’t want to be named.
However, Jaitley said the bill has seen extensive deliberations involving the standing committee of finance, empowered committee of state finance ministers and the centre over the last few years.
“The constitution amendment bill for GST has seen the most extensive debate since 1950s. Nobody has the monopoly to stop the growth of the country. The UPA (United Progressive Alliance) should start backing legislations that (the alliance) itself has introduced," said Jaitley, adding that GST’s implementation will increase gross domestic product growth by 1-2 percentage points.
The finance minister said GST will simplify and harmonize the indirect tax structure, reduce cost of production and inflation in the economy and ensure India becomes a common seamless market.
He said GST is unlikely to lead to any major revenue loss for the states.
Even manufacturing states such as Maharashtra, Gujarat and Tamil Nadu, which will lose out because of the consumption-based taxation approach of GST, will gain because they will get revenues from taxation of services, the minister said.
The government will need to get the constitution amendment bill passed by both houses of Parliament in the current session itself if it wants to roll out GST from April next year, says Amit Kumar Sarkar, partner, Grant Thornton India LLP.
“If Parliament passes the constitution amendment bill in the current session, states will ratify it in their respective monsoon sessions. After that, the government will have to bring in the GST Act in the winter session for rolling out GST from next fiscal," he said.
The bill will be debated next week as the opposition members sought more time to move any amendments.