Lok Sabha passes all four Bills related to GST
During the day-long debate, Finance Minister Arun Jaitley defended the four-slab structure, and said that without it the taxing system would be regressive.
The Lok Sabha on Wednesday passed all four Bills related to the Goods and Services Tax after a day-long debate on them. During the debate the Congress alleged that the system was far from the government’s claim of “one nation, one tax”, referring to the GST’s four-slab structure. Finance Minister Arun Jaitley, however, said the lack of different slabs in the taxing system would make it regressive because all goods cannot attract the same tax.
“If we don’t have that, it’ll become a regressive tax. Some goods are essential for the poor,” Jaitley said, “A BMW and Hawai chappal [flip-flops] can’t have the same tax. What are the goods, who uses it, matters.” He added that this was a “revolutionary bill that would benefit all”.
The four slabs in the GST are 5%, 12%, 18% and 28%. The government has set the maximum GST rate at 40% and introduced provisions for an anti-profiteering authority and arrests for evading taxes.
Senior Congress leader Veerappa Moily objected to the anti-profiteering clause in the Bill, calling it “far too draconian”. The Opposition had also expressed concerns about how the Bills were introduced in Parliament on Monday.
Finance Minister Arun Jaitley had tabled the Bill in the Lower House on Monday, hoping to have them passed with consensus in Parliament in the current Budget Session. The Bills that were tabled to include the Central Goods and Service Tax Bill, Union Territory GST Bill, Integrated GST Bill and the Compensation Law Bill.
“States have pooled in their sovereignty into the GST Council, and the Centre has done the same. The council held 12 meetings to make it a process based on consensus and recommendations,” Jaitley said in Parliament.
President Pranab Mukherjee had approved the Bills on September 8, 2016, after it was ratified by 16 states. The GST, which seeks to overhaul India’s complicated taxing system by replacing 17 different taxes with a single levy, was passed by the Rajya Sabha on August 3. The Union Cabinet had approved the Bills on March 20.