Is the GST bill is coming or not, is not the discussion point any more. Today, most of the parties are in support of the amendment. Since it has wide ranging implications there are definitely some issues relating to its formulation. With the benefits that are likely to accrue for the economy, a few compromises at this stage will not matter much. In a bid to make it an excellent GST bill the parliamentarians should not get in the way of a good GST reform.
It is in the knowledge of everyone that the government is pushing for GST implementation from April 2016. For this, it was necessary that the bill should have been passed in the monsoon session of the parliament. Still the government is trying to make up the loss by planning to convene a special two day session for passage of the bill.
If one looks at the activity this year, the bill was passed in the Lok Sabha in the Budget session and referred to the Rajya Sabha select committee that has 21 members. The committee had made some amendments and recommendations. So it has come back to the Lok Sabha for clearance. In the subsequent activity 50% of the state assemblies must approve the bill. Finally it will need the stamp of approval from the President.
The GST council formation will take place within two months after the President’s assent. The council will then work on the bill and draw out the guidelines for its introduction. All these activities are sequential and a delay in the passage of the bill is likely to push the implementation deadline further than April 2016.
But as long as there is seriousness among the parliamentarians for passing the GST bill a few months here and there would not matter. In case of Direct taxes the implementation is generally planned from the beginning of the financial year. The GST can be formulated and implemented any time during the fiscal year. So a delay from April 2016 will not mean 2017 implementation.
The largest benefit that is likely to accrue from the GST is that the entire country would become an economic market. Needless to say markets of this size and magnitude are rare in the whole world. The movement of the goods and services throughout the country would lead to ease of business. The likely impact on the GDP growth will be to the tune of 1 to 2%. With so much at stake, any delay in the implementation is a cause of worry for the finance minister as well as for the government of India.
The Congress has come forth with three demands of late. They want to cap the maximum GS tax at 18%. Secondly they want the levy of 1% proposed in lieu of the CST to appease the states, should go. And finally they want a mechanism for redressal of GST related issues.
It is difficult to please one and all. The time has come to pass the Good GST bill in the broader interest of the country.