New Delhi, July 1 : The Goods and Services Tax (GST), India’s biggest tax reform since Independence, rolled out past midnight Friday in the precincts of the hallowed Central Hall of Parliament to usher in a new indirect tax regime in an event that sought to evoke memories of the famous ‘Tryst with Destiny’ night the country got freedom in 1947.
A minute after the stroke of midnight, President Pranab Mukherjee and Prime Minister Narendra Modi pressed the button to launch the new indirect tax regime on a digital screen with “GST” emblazoned on it in a golden hue.
Conceived on the principle of ‘one nation, one tax, one market’, the tax that subsumes 17 central and state levies was launched in the presence of Vice President Hamid Ansari, former Prime Minister H.D. Deve Gowda, Lok Sabha Speaker Sumitra Mahajan, Finance Minister Arun Jaitley, MPs, chief ministers, state finance ministers, officials of the Centre and states.
Notwithstanding the fact that the GST Law was a consensus product evolved over 14 years, the function in colorfully-decked Parliament House was boycotted by major opposition parties like Congress, Trinamool Congress, RJD, DMK and Left parties, saying the government was making a spectacle of a legislation for self-promotion, a charge Jaitley rejected. In keeping with his party’s decision, former Primer Minister Manmohan Singh kept away from the event. However, MPs and leaders of Congress allies NCP and Samajwadi Party attended the function.
Addressing the gathering, President Pranab Mukherjee said the introduction of GST is a moment of precedent for the country and a matter of personal satisfaction for him because of his role as Finance Minister earlier. “I had always believed that GST was a matter of time and was happy when it was enacted and I gave assent to the Constitution amendment last year,” he said.
He said the new law is a tribute to the maturity and wisdom of Indian democracy. The GST Council was a unique experiment under the Indian Constitution because of the shared sovereignty.
In his speech, Modi said the roll out of GST is the best example of cooperative federalism and success of Indian democracy. “The credit for the new law does not go to one party or one government but was a shared legacy of all,” he said.
In a veiled rejoinder to opposition criticism of the midnight function in Parliament, the Prime Minister said there cannot be a “better and sacred” venue than the Central Hall for the historic roll out.
The GST process cannot be confined to just economic system but was a collective effort of all, he said, adding it was a product of long discussions among the best brains of the country. “It is an example of Team India’s strength and ability,” he said.
Referring to the eminent personalities like Jawaharlal Nehru, Sardar Patel, Maulana Abul Kalam Azad and Babu Rajendra Prasad who had adorned the Central Hall, Modi said like Patel had integrated the country, the GST would integrate the country economically.
He described the GST as ‘Good and Simple Tax’ — good because there will be no tax on tax and simple because there will be only one form of tax. It will also help eliminate black money and corruption because of the transparency it seeks to bring in, he said.
Modi said whatever was lacking in growth and development of the country, GST will provide the opportunity to realise them.
Ahead of the launch, the GST Council slashed the rate of fertilisers from 12 per cent to 5 per cent and of exclusive parts of tractors from 28 per cent to 18 per cent to reduce the burden on farmers.
The launch of GST, which the government claimed would result in reduction of prices of articles of common consumption, also came amidst fears from various business sections that prices would go up under the new regime.
Welcoming the gathering, Jaitley described GST as the biggest and most ambitious tax reform which is an achievement of the country through consensus. It highlights the fact that India can rise above narrow politics and work for country’s benefit. In making the GST, neither the Centre nor the states gave up their sovereignty.
He said all MPs, state governments, political parties, state finance ministers and dedicated officials of the Centre and states deserved to be appreciated for realising the project of GST Law.
Jaitley said under GST, the revenues will go up as the compliance goes up and the GDP will also increase.
Parliament’s Central Hall has witnessed such a function only on three occasions earlier. First was on the occasion of Independence when first Prime Minister Jawaharlal Nehru made the famous ‘Tryst with Destiny’ speech. The second was on the occasion of silver jubilee of Independence in 1972 and golden jubilee in 1997.
The GST is expected to check tax evasion and broaden tax base. In the new regime, all filings will be done only through electronic mode to ensure non-intrusive administration. This will minimise taxpayers’ physical interaction with the tax officials.
The GST regime seeks to reduce rates of over 50 per cent of items of daily use and charge others at much lower rate of 5 per cent, 12 per cent and 18 per cent.
A higher tax rate is imposed on luxury and sin goods at 28 per cent in the new regime. Certain services like telephone, banking and insurance are expected to feel the pinch of higher taxes.
The GST also promises taxpayers a refund against their sales within 60 days. Similarly, exporters will get refund within seven days. For protection of consumer rights, the new law provides anti-profiteering provisions. In a departure from the normal practice, the GST will be administered together by the Centre and the states.
New Delhi, July 1 : President Pranab Mukherjee on Friday said that introduction of GST was a “momentous event” for the nation and “a tribute to the maturity and wisdom of India’s democracy” while pointing out that the success of major changes always depends on their effective implementation.
Mukherjee also said in coming months, based on the experience of actual implementation, the GST Council and the central and state governments should continuously review the design and make improvements, in the same constructive spirit.
“Introduction of Goods and Services Tax (GST) is a momentous event for the nation. This historic moment is the culmination of a 14-year-long journey which began in December 2002, when the Kelkar Task Force on indirect taxation suggested a comprehensive Goods and Services Tax (GST) based on the Value Added Tax principle,” said Mukherjee while delivering his speech in the Central Hall of Parliament at the GST launch ceremony.
“I was closely involved in the design and implementation of GST as the then Finance Minister. I also had the privilege of giving assent to the Constitution (One Hundred and First Amendment) Act, 2016 (the GST Act),” he added.
Mukherjee said: “It is also a moment of some satisfaction for me personally because, as the Finance Minister, I had introduced the Constitution Amendment Bill on March 22, 2011.”
“I was closely involved in the design and implementation and had the occasion to meet the Empowered Committee of state Finance Ministers, formally and informally, as many as 16 times. I also met the Chief Ministers of Gujarat, Bihar, Andhra Pradesh and Maharashtra a number of times,” he added.
Mukherjee also said the new era in indirect taxation was the result of a broad consensus arrived at between the Centre and the states.
“It (GST) is a tribute to the maturity and wisdom of India’s democracy. The GST will make exports more competitive and also provide a level playing field to domestic industry to compete with imports,” said Mukherjee.
“Under the GST, the tax incidence will be transparent, enabling full removal of tax burden on exports. The GST will be administered through a modern world-class information technology (IT) system,” he added.
“A key feature of the system is that buyers will get credit for tax paid on inputs only when the seller has actually paid taxes to the government. It (GST) will create a strong incentive for buyers to deal with honest and compliant sellers who pay their dues promptly. Success of major changes always depends on their effective implementation,” he pointed out.
Mukherjee also said: “GST is a disruptive change. It is similar to the introduction of VAT when there was initial resistance. When a change of this magnitude is undertaken, there are bound to be some teething troubles and difficulties in the initial stages.
“We will have to solve these with understanding and speed to ensure that it does not impact the growth momentum of the economy,” he added.
New Delhi, July 1 : Prime Minister Narendra Modi on Friday said the Goods and Services Tax (GST) would help chart out a new course for the country and its roll-out should not be seen as the achievement of any one party or government but a collective effort of all.
“We are deciding India’s future course. We will chart a new course for the country at midnight with the launch of GST which is not an achievement of any party or government but a collective legacy. It is a result of our collective efforts,” Modi said, speaking in Parliament during a special function to launch the GST.
Calling GST “good and simple tax”, the Prime Minister said there would be a little problem in the beginning but everyone would familiarise with it in due time.
Modi urged people not to believe in rumours.
President Pranab Mukherjee, Vice President M. Hamid Ansari, Modi along with several cabinet ministers and MPs were present in Parliament.
The Prime Minister said with this landmark tax reform measure, the dream of “one nation, one tax” will be achieved.
He also clarified that the scope of GST was not limited just to the financial system but social reforms as well.
“GST is not just ‘ease of doing business’ but ‘way of doing business’. It is an important step in economic reform. Ahead of that it is also a social reform towards honesty.”
Modi said that GST was an example of team work and cooperative federalism.
“Since past several years, the process was carried out under the guidance of eminent personalities and various teams which gives example of cooperative federalism. It will give us more strength to move ahead together. It is a reflection of team India’s potential.
“When the Constitution was being written, intellectuals from across the country used to debate, there would be moments of disagreement, (but) they would find ways out. If they had a disagreement, they would find a middle path. Likewise GST is also an outcome of long-held thought process,” the Prime Minister said.
All states and the central government discussed it for years, he added. “Best brains in the country debated over it continuously, that is why we could see the GST roll-out today.”
Talking about the Central Hall, the Prime Minister said with the presence of many national leaders the place has become hallowed.
Pt Jawaharlal Nehru, Maulana Abul Kalam Azad, Sardar Vallabhbhai Patel, Dr Babasaheb Ambedkar, Acharya Kripalani, Rajendra Babu, Sarojini Naidu were sitting in the first row when the first meeting of the constituent assembly was held.
He said the Constitution offered everyone equal opportunities and rights. “GST brings uniformity in the economic system.”
“India has got rid of over 500 taxes and is ushering into advanced taxation system. It is more simple and transparent. It will help in containing black money and corruption,” he said.
Those who want to invest in India will understand one type of tax regime easily, he asserted.
He also said the new tax regime will give opportunities to backward states like Uttar Pradesh, West Bengal, Bihar, Odisha and in the North-East to progress.
The post GST rolls out past midnight from Central Hall of Parliament appeared first on Samachar Live.