Mr Jaitley replied to clarifications on GST after a debate in Lok Sabha and it was passed unanimously.
New Delhi:
The tax rate under the GST regime will be kept at "minimum workable rate" as no state government can annoy its people by having a higher rate, Finance Minister Arun Jaitley said today in the Lok Sabha which passed the historic legislation for India biggest tax reform, the GST, to amend the Constitution.
He, however, virtually ruled out an assurance that the GST legislation will not be brought as Money Bill, a key demand of opposition Congress.
Stating that the rate in the new sales tax regime is a matter to be decided by calculations and not by political slogans, Mr Jaitley said GST will bring in an efficient system and help bring down the tax rates gradually.
"They (GST Council) will, of course, try to arrive at a minimum workable tax rate and their effort will be to bring it down from the prevailing rate... Gradually, we will bring it further (GST rate) down because GST will bring efficiency and do away with tax-on-tax," he said, while replying to a debate on the Constitution (122nd Amendment) Bill to pave the way for Goods and Services Tax (GST).
He said the new indirect tax regime, which will subsume all local levies, excise and service tax, will "check leakages, increase tax base for centre and states, eliminate corruption and cascading effect of tax on tax, reduce tax evasion, and improve ease of doing business."
Mr Jaitley said the Chief Economic Advisor had suggested a band of 16.9-18.9 per cent for fixing GST rate. While the NIPFP report had suggested that the rate be kept at 24 per cent, some states have been demanding between 20-22 per cent.
With regard to Congress demand that subsequent GST related bills should be brought as Finance Bill and not as Money Bill, Mr Jaitley sought to explain why it cannot be done.
"If it has the ingredient of Article 110 then it shall be deemed as Money Bill. If a ruling party fails to pass a Money Bill, then the government falls. Can you then say that it is not a Money Bill? So the option can work anyway, what is within the definition of Money Bill, will be a Money Bill otherwise it is not a Money Bill," he said.
As per the provisions in the Constitution, a Money Bill is discussed and put to vote only in the Lok Sabha.
He, however, virtually ruled out an assurance that the GST legislation will not be brought as Money Bill, a key demand of opposition Congress.
Stating that the rate in the new sales tax regime is a matter to be decided by calculations and not by political slogans, Mr Jaitley said GST will bring in an efficient system and help bring down the tax rates gradually.
"They (GST Council) will, of course, try to arrive at a minimum workable tax rate and their effort will be to bring it down from the prevailing rate... Gradually, we will bring it further (GST rate) down because GST will bring efficiency and do away with tax-on-tax," he said, while replying to a debate on the Constitution (122nd Amendment) Bill to pave the way for Goods and Services Tax (GST).
He said the new indirect tax regime, which will subsume all local levies, excise and service tax, will "check leakages, increase tax base for centre and states, eliminate corruption and cascading effect of tax on tax, reduce tax evasion, and improve ease of doing business."
Mr Jaitley said the Chief Economic Advisor had suggested a band of 16.9-18.9 per cent for fixing GST rate. While the NIPFP report had suggested that the rate be kept at 24 per cent, some states have been demanding between 20-22 per cent.
With regard to Congress demand that subsequent GST related bills should be brought as Finance Bill and not as Money Bill, Mr Jaitley sought to explain why it cannot be done.
"If it has the ingredient of Article 110 then it shall be deemed as Money Bill. If a ruling party fails to pass a Money Bill, then the government falls. Can you then say that it is not a Money Bill? So the option can work anyway, what is within the definition of Money Bill, will be a Money Bill otherwise it is not a Money Bill," he said.
As per the provisions in the Constitution, a Money Bill is discussed and put to vote only in the Lok Sabha.
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