Goods and Services Tax (GST) Bill was passed by Rajya Sabha on Friday.
Highlights
- All 443 MPs present in Lok Sabha voted in favour of GST
- GST is a major step "that will deliver us from tax terrorism": PM Modi
- Now, at least 15 or half of India's 29 states must ratify the bill
The Lok Sabha has unanimously passed a constitution amendment bill that enables mega reform Goods and Services Tax Bill or GST. The bill will now be sent to state assemblies for ratification.
Here are the latest developments:
All 443 members present in the Lower House of the parliament voted in favour of the bill, which was passed by the Rajya Sabha last week, also unanimously.
Speaking in a discussion in the Lok Sabha today Prime Minister Narendra Modi described the national sales tax as a major step "that will deliver us from tax terrorism."
"GST means a Great Step Taken by India, a Great Step of Transformation, Great Step towards Transparency," said the PM.
"I think its a good step for the country. We earlier had three major differences on GST that we have worked out. We still have an issue on the 18% cap on the rate of GST, which will be discussed in December," said Rahul Gandhi, whose Congress party has supported GST after stalling it for months.
In his speech, Finance Minister Arun Jaitley made a strong pitch for "one nation one tax," stating that India's biggest tax reform will see the Centre and states "pooling their sovereignty to reap the many benefits that will ultimately lead to India's progress".
"Tax evasion will lessen, there will be no tax on tax or a cascade of taxes and ease of doing business will improve," said Mr Jaitley. Both the Prime Minister and the Finance minister thanked opposition parties profusely for their support to the bill.
The Lok Sabha had cleared the bill last year, but the Rajya Sabha sent it back with major changes last week, which the lower house had to clear today.
At least 15 or half of India's 29 states must ratify the bill and the government targets getting that approval within 30 days as it chases an April 1, 2017 deadline for implementation of GST. Several states will have to call for special sessions to clear GST in the next 30 days.
A GST Council will be formed after that with states and the centre as members. This council will recommend rates and other modalities for GST, which will replace a raft of different state and local taxes with a single unified value added tax system turning India into world's biggest single market.
Parliament will need to clear two more GST-related bills and each state will have to pass its own law. To meet its deadline the government will push to get this done in the winter session of parliament.
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