India's finance minister Arun Jaitley has introduced four bills in the Lok Sabha aimed at rolling out the Goods and Services Tax (GST) and usher in landmark tax reforms in the country. Jaitley introduced the Central GST, Integrated GST, Union Territory GST and the Compensation Law for passage by Parliament to implement the one-nation, one-tax regime.
The government proposes to launch GST from July 1 and was hoped that rolling out of the GST would add up to 2 per cent to India's economic growth. Earlier, Jaitley had emphasised the urgency to pass the GST laws during the current session of Parliament, saying the Centre and the states will otherwise lose their right to collect indirect taxes after September 15.
The approval of Parliament, coupled with separate nods by all the State Assemblies, will complete the legislative process for the roll out of one-nation, one-tax regime by merging central taxes like excise duty and service tax as well as state levies like VAT.
The GST Council has already approved four-tier tax slabs of 5, 12, 18 and 28 per cent plus an additional cess on demerit goods like luxury cars, aerated drinks and tobacco products. The work on for putting various goods and services in the different slabs is slated to begin next month.
Govt plans mega public outreach
Meanwhile, Prime Minister Narendra Modi has asked ministers and MPs to engage in a major public outreach over the GST. The PM told a recent meeting of the cabinet that the government needs to vigorously explain the benefits of the tax reform that he thinks would be a significant milestone for the NDA government. He was understood to have spoken of the need to involve the party organisation and MPs as well.
Modi has flagged the need to explain the tax measures with the common man as a key target for his ministers and party MPs as the government believes the benefits of one of the biggest tax reform initiatives needs to be communicated properly, especially when there are concerns over the impact on prices.
Publicity through media channels is already underway. The exercise comes as the GST Council, comprising state finance ministers and the Centre, is ready with the final plan and is hoping to roll out GST from July, three months behind the original deadline. But briefing lawmakers is only a small part of the blitzkrieg lined up by the finance ministry, which has instructed its commissioners to fan out in the field and work along with the state tax bureaucracy. Officers have been asked to organise at least one town hall meeting with tax practitioners, lawyers and businessmen in every town which has a population of 100,000 or more.
“In Mumbai and Delhi, we will have hundreds of meetings with trade bodies and other stakeholders,” said a source.
