India's Finance Minister Arun Jaitley said that the government had made significant headway on the Goods and Services Tax (GST) and hoped to soon implement the most ambitious indirect tax reform since independence. Jaitley also said the government has been able to resolve legacy tax issues and added that the list of exemptions that would be phased out would be unveiled soon.
“Systematically, one by one, we have been resolving (taxation issues) ... That fear of retrospective taxation has gone. Some of those problems remain and they remain because of legal reasons. I have publicly announced that we are looking for processes by which we can resolve some of these,” Jaitley said.
Jaitley said he was ready to have a dialogue with Congress on GST. The government has identified implementing GST as one of the key priorities but the opposition has blocked the move in Parliament. The government will make a fresh bid to get the Constitution amendment bill approved in the winter session of Parliament. Reacting to Jaitley's comments, the Congress party said parliamentary democracy cannot be reduced to “just one bill” and urged the NDA to shed its “confrontational mindset.” “The Prime Minister and his government have both arrogance and confrontational mindset,” said party spokesman Anand Sharma. “By berating, ridiculing and intimidating them (the opposition) on a daily basis cannot help in creating that atmosphere. It is their call,” Sharma said, adding that the onus of a successful winter session was with the PM and his party.
Jaitley said the government would unveil the list of exemptions and hoped that the first tranche of reduction in corporate tax would be done in the next budget. “I have announced a road map for direct taxation ... (to) bring corporate tax down to 25% by phasing out some of those exemptions. We are going to put in the public domain in the next few days some of those exemptions that we intend to phase out in the first round,” he said.
He also said that government would soon announce a major policy for the stressed power sector, which has been reeling under high debt. While Jaitley did not elaborate, it is believed that the Cabinet at its next meeting may consider recasting £43billion of loans of nine power distribution companies subject to states agreeing to raise electricity tariff over a period of time.
