Govt hopeful of GST Bill passage: Jayant Sinha

Calls it the 'most revolutionary transformation of taxes in India since Independence'

Minister of State for Finance Jayant Sinha on Saturday expressed hope that the Constitution amendment Bill on the goods and services tax (GST) would be passed in Parliament and the new indirect taxation regime would be introduced "soon".

"On GST... we are hopeful, we remain hopeful," he said while addressing the annual session of the PHD Chamber of Commerce and Industry, a day after Prime Minister Narendra Modi reached out to the Congress leadership.

Talking about India's fiscal architecture, Sinha said, "When GST is implemented, it will be the most revolutionary transformation of taxes in India since Independence. That's how big a game-changer it is."

The government needs the Rajya Sabha's approval for the Constitution amendment Bill on GST in the ongoing winter session in order to roll out the new indirect tax regime from April 2016.

Sinha said that the government is trying to reform the tax system to make it simpler and more predictable. He added that a step in that direction is bringing down corporate tax rate to 25 per cent from the present 30 per cent by phasing out exemptions.

"Part of the reason to get rid of the exemption on the corporate tax side is that we want to reduce litigation - so that we don't have to do the adversarial rent-seeking tax exercise," he explained.

Sinha added that the finance ministry has already heard views of the pharmaceutical and the automobile sectors on the phasing out of the exemption and has invited industry leaders to express their opinion.

"Many of you are going to be very upset because these exemptions are going to go ... but it is a big change," he said.