India's Upper House has approved four important bills for the implementation of the goods and services tax (GST), in a move that will pave the way for rollout of the ambitious indirect tax reform from July 1. Now, state legislatures will have to approve the SGST bill.
Identified as a top reform priority by the Narendra Modi government, the tax reform will subsume central and state levies such as excise duty, additional duties of customs, service tax, value added tax, central sales tax, entry tax, octroi and luxury tax. "On May 17-18, we will give final approval to rules and rates, looks like it can be implemented from July 1," Finance Minister Arun Jaitley said. The government has hinted that product and service-wise GST rates may be announced closer to the rollout date, while finalising nine sets of rules for the indirect tax reforms.
"The passage of the four bills necessary for introduction of GST by Rajya Sabha reaffirms that July 1 is the go-live date for the most significant indirect tax reform of the country," said MS Mani, senior director at consulting firm Deloitte.
Amendments to the bills were being taken up in the Rajya Sabha by deputy chairman PJ Kurien, Congress MP Jairam Ramesh said he was not moving them. "Former PM Manmohan Singh has taken his approach in the spirit of consensus and in respect of the federal structure," he said. In support of the policies, Singh called the move a game changer. Once the four bills were cleared, finance minister Arun Jaitley walked up to Singh and shook his hands, while Singh congratulated him on passage of the bills.
Jaitley said, "When it came to the larger interest of the nation, all political parties have spoken in one voice." He called the GST bill a "collective achievement" in which all states and political parties had contributed.
