Arvind Panagariya on Wednesday said that a lot of inefficiencies will be eliminated once GST is passed. In an interview to CNBC-TV18, Panagariya said, “first obstacle for the government to cross, is to get the Constitutional Amendment Bill passed. “I expect GST to bring in simplification in indirect taxes and will make tax processes more quick and will further help the level of gross domestic product (GDP) and the rate at which India grows”, he added. However, the passage is not the end of it all. Lots of reforms are under process and it’s time we looked at GST as a larger package of reforms that the government is undertaking, Panagariya highlighted.
The bill, which has already cleared Lok Sabha, is likely to be sent back to the lower house after it gets passed in the Rajya Sabha. This is due to some amendments that the government has agreed to make in the GST Bill to get support of political parties, especially Congress. Finance minister Arun Jaitley, at a meeting with his state counterparts last week, promised to keep the incidence of tax low while safeguarding the revenue of the states. With the government also assuring support to states in terms of compensation for resulting revenue loss, the GST Bill expected to see a smooth passage today.
For the Bill to sail through the RS, two-thirds of its members (among not less than 50% present) should vote in its favour. While the ruling National Democratic Alliance has 72 members, several major non-NDA parties like SP, NCP, Trinamool, JD(U), CPI(M), etc, are inclined to support the Bill along with many independents. As the Congress with 60 members in the 244-member Upper House is set to support the Bill, its passage now looks almost certain.