GST bill passed in Rajya Sabha

The landmark legislation will give further impetus to ease of business in the world’s fastest growing major economy. “The GST regime will be a modern, better system that will help tax-payers seamlessly transfer of goods and services across country and check evasion. Some economists believe it will also give boost growth rate,” Jaitley said.

Even as the Centre acknowledged the contribution of the Congress in the groundwork on the GST bill, it didn’t accede to its demand that the next three bills — to roll out the new tax — will not be made money bills. In such bills, the Rajya Sabha can only discuss but can’t vote.

“Even if the Constitution has provisions about a money bill, the government can always choose to bring a bill as a simple financial bill,” former finance minister P Chidambaram said in the House, minutes before the constitution amendment bill was taken up for voting.

“We will go by the Constitution and precedence,” replied Jaitley.

The government had circulated nine amendments on Tuesday to address concerns of the Congress and other opposition parties. These included a more robust grievance redressal mechanism, scrapping of 1% additional tax, and mandatory compensation to states for revenue loss under the new tax regime.

It will hope to have the bill cleared before the end of the monsoon session on August 12, and launch it at the start of the next fiscal year — April 1, 2017. But it looks ambitious; the earliest the GST will kick in will be in July, say experts.

Under the new system, the states and the Centre will collect identical rates of taxes on goods and services. The Centre will also levy and collect the Integrated Goods and Services Tax (IGST) on all inter-State supply of goods and services. The IGST mechanism has been designed to ensure seamless flow of input tax credit from one state to another.