Rallying the Congress and other opposition parties ,the GST Bill is finally passed in Rajya Sabha with India becomes one nation ,one tax

New Delhi August 4:As the Goods and Service Tax bill clears its way with a thumping majority in the Rajya Sabha.Finance Minister Arun Jaitley on Wednesday moved that the GST Bill – The Constitution (One Hundred and Twenty-second Amendment) Bill, 2014 be discussed and passed in Rajya Sabha. The discussion on the GST bill came after months of discussions between the ruling party and the opposition – with both sides meeting multiple times to negotiate amendments.

After being subject to months of haggling and histrionics, the Goods & Services Tax (GST) finally had its historic day in the Rajya Sabha with the passage of the Bill to amend the Constitution, paving the way for what is popularly referred to as the concept of “one nation, one tax.”

Barring the AIADMK, which staged a walkout on the plea that it violated federalism, all others, including the Congress, voted for the Bill.

Led by the former Finance Minister P. Chidambaram, the Congress, supported by members of some other parties, made a valiant effort to extract an assurance from Finance Minister Arun Jaitley that as and when he would introduce the subsequent legislation to operationalise the GST, it would be as finance rather than money bills. This was to ensure that they would also be voted in the Rajya Sabha.

However, Mr. Jaitley refused to yield, stating that he could not give a commitment on future legislation whose contours would be decided by the Centre and the States together.

The GST will have two components keeping in mind the federal structure of India: the Central GST (CGST) and the State GST (SGST).

The shift to the GST regime will lead to a uniform, seamless market across the country. It will be a uniform rate, will check evasion, and boost growth rates, Mr. Jaitley said initiating the debate.

Earlier in the day, lead speaker for the Congress, Mr. Chidambaram, made it clear that the main Opposition party will support the long-pending Bill only if the government gave firm assurances on two things: keeping the GST rate capped at 18 per cent in the subsequent legislation needed for the GST’s roll-out and bringing forth these as financial bills rather than money bills, which the Upper House will not just discuss but also vote on.

The Congress members voted in favour of the Bill.

The Finance Minister said that his discussions with States led him to believe that the rates would be moderate and less onerous than the combined burden of the Central and State taxes on goods and services, which comes at present rates to about 27%.

However, he said that it was not possible for him to give an assurance on legislations that had not yet been drafted. Before the Bill was put to vote, the AIADMK members staged a walkout from the House.

The passage of this crucial bill had been held up for many years owing to fierce political infighting. Its final advancement now marks a historic victory for Prime Minister Modi as he eyes a telling economic boost for Asia’s third-largest economy.

Investors have billed the GST as a “silver bullet” for India’s economy. They believe it would supplant multiple centtal and state levies, part of a chaotic structure that causes costs to balloon for businesses.

India’s 29 states currently levy their own sales taxes, dividing the Indian market. GST aims to provide a uniform tax structure across the country.

The Modi government expects this crucial piece of reform to add up to 1.5 per cent to its annual economic growth of 7.5 per cent.