Dr. Manmohan Singh seeks cooperation between federal, state govt. on GST

Stating that the passage of the much-awaited Goods and Services (GST) Bill can be a 'game changer', former prime minister Dr. Manmohan Singh on Thursday said there must be a cooperation between the federal government and the state government to resolve those outstanding issues.

"It can be a game changer but we should not assume that there will be no difficulties on the way. There must be a constructive spirit, cooperation between the federal government and the state government to resolve those outstanding issues," he said.

The Rajya Sabha earlier in the day passed four GST Bills without amendments setting the stage for the government to launch on July 1, the country's biggest tax reform since Independence.

 

Just before the bills were voted on after an eight-hour debate in the upper house, the former prime minister intervened and asked his party not to seek changes in them to "maintain consensus and federal agreement."

Without the support of the Congress, which is the largest party in the Rajya Sabha, amendments moved by other Opposition parties like the Trinamool Congress and the Left were voted down.

Replying to the debate, Union Finance Minister Arun Jaitley said the GST, which will bring a uniform indirect tax regime in the country, will not lead to inflation as people worry.

He said once the new tax regime is implemented, the harassment that businesses face having to deal with multiple authorities will end and India will be have one rate for one commodity throughout the country.

Jaitley said successive governments have contributed towards GST and no one person can take credit for it.

"This Bill, I have no hesitation in conceding, is a collective property," he said.

The four bills passed today - the Central GST bill, the Integrated GST bill, the Union Territories GST bill and the compensation law - have already been cleared by the Lok Sabha, where the government has a big majority, last week.

Now a state GST bill will be presented in state assemblies for their approval.

The GST rates will be discussed by the powerful GST Council on May 18-19.

The council, made up of state Finance Ministers and headed by Jaitley, has recommended a four-tier tax structure of 5, 12, 18 and 28 percent.

On top of the highest slab, a cess will be imposed on luxury and demerit goods to compensate states for revenue losses in the first five years after GST is implemented.