New Delhi – On Monday the long-awaited Good and Service Bill (GST) was finally passed by the parliament. This moment may be noted in History as a historic step taken by the government for tax reformation.
The bill was passed in the Lok Sabha yesterday with 443 members voting in its favor. It was earlier passed in Lok Sabha on May 6, 2015, and was then transferred to the Rajya Sabha.
On August 3, 2016, after making some needed changes the Upper House moved the GST bill back to the Lower House.
For the bill to get approval by the Upper House, the current government had to move six official amendment including removing 1 percent additional tax from the bill. Every party gave their approval other than AIADMK who staged a walkout to show opposition to the GST bill.
For the GST bill to be implemented as a law, it will have to be ratified by at least 16 of the 29 state assemblies. Prime Minister Narendra Modi is taking every measure to assure that it gets the state approval.
Furthermore, the PM emphasized the importance of this bill as it will play a crucial role in ending tax terrorism in the country. It will also put a stop to corruption and black money.
One thing that the PM has made quite clear in the Parliament was that they would not introduce it as a money bill, one of the demands of the Congress.
The current Finance Minister Arun Jaitley said that the GST bill would help to keep the tax rate at the minimum workable rate. He also emphasized that it is the duty of the state government not to impose people with the higher rate.
What role will the GST Bill play in the economy? It is a destination based tax which will raise all other taxes at the central and state level like excise duty, service duty, entertainment tax, etc. One of the best thing about the bill is that it will bring the 29 markets of India into a common market.
Economist believes when this bill will come into action it will add two percent point to the gross domestic product (GDP) and after initial inflation, the market will see a steady rise.
For now, the action has been shifted from the Parliament to the states. The current government will now have to wait with bated breath to get the bill ratified by a majority of states.
A GST Council has been set up by the current government to see that the bill can transform the economy. The need for the GST bill is to bring in the system of ‘one country one tax’.
Narendra Modi along with his team will have to do everything in its power to see that the bill is implemented as a tax reform by 1st April 2017.