The Constitution amendment Bill to pave the way for the Goods & Services Tax (GST), which is described as the biggest taxation reform in recent history, and which Prime Minister Narendra Modi on Monday said will free the nation from tax terrorism, is just a tiny step away from becoming an Act.
Eleven years after the GST was first proposed by former Finance Minister P. Chidambaram, in 2005, Parliament on Monday passed the Bill.
All 443 members present in the Lok Sabha — which had earlier passed it in May 2015 —voted in favour of the Constitution (122nd Amendment) Bill, 2014, as amended by the Rajya Sabha last week. AIADMK members walked out before the vote, as they did in the Rajya Sabha.
Ratification required All other parties supported it, but speakers from most sought assurances from the government that the GST would not push up prices of goods and services. The amendment will have to be ratified by at least 16 States.
Both Prime Minister Modi and Union Finance Minister Arun Jaitley expressed gratitude to all political parties for approving the amendment in one voice and hailed the coming on board of most political parties and States as the strength of democracy.
PM’s pat for parties “GST can’t be seen as a victory of a party or government…It is the victory for the democratic ethos of India and a victory for everyone,” Mr. Modi said, noting that all parties had risen above the differences in ideologies in support of the amendment. He said the Bill would have been in trouble in the Rajya Sabha due to lack of numbers and the reluctance of some States, but in the end all parties backed it.
He said the new indirect taxation regime, which will subsume 7-13 taxes, will free the nation from tax terrorism and help end corruption as traders will be compelled to give proper bills. “The consumer will be king,” Mr. Modi said. GST was a Great Step by Team India, he said.
Initiating the debate in the House, Mr. Jaitley said the government’s effort was to build across-the-board support as it didn’t want a “divided Parliament” to approve it. “The process of building consensus slowed the progress on the Bill,” he said.
Lead speaker for the Congress, Veerappa Moily urged the government to acknowledge that the idea of introducing GST was an offshoot of the liberalisation policies initiated by Dr. Manmohan Singh under Prime Minister P.V. Narasimha Rao in 1991. “If there was political consensus in 2011, this Bill would have been passed then,” he said.
Several speakers, including Mr. Moily, Dharmendra Yadav of SP and Congress leader Mallikarjun Kharge, sought to know why Prime Minister Modi had opposed the GST as the Chief Minister of Gujarat. In his intervention in the debate, while owning up to having doubts over the GST as the Chief Minister of Gujarat when the Bill was first introduced in the House in 2011, Mr. Modi said that it had led him to speak several times to the then Finance Minister Pranab Mukherjee and as Prime Minister that experience had come in handy for him.
Mr. Kharge said that the government had with its majority “bulldozed” the Lok Sabha’s suggestions in 2014. “If you paid heed, this Bill would have been passed earlier…You are responsible for stalling…your Finance Minister said the Congress had obstructed and blocked the growth of this economy — take it all back now,” Mr. Kharge said, even as former chairman of the empowered committee Sushil Modi watched the better part of the proceedings from the gallery.
After passage of the Bill by Parliament, Congress vice-president Rahul Gandhi said: “GST is a good step for the country.”
