Shaktikanta Das, Secretary Economic Affairs on Thursday said that the Goods and Services Tax (GST) is an outcome of hard work done in the last 10 years. “GST is a transformative piece of legislation. It will boost economic activity,” he told ET Now. “Tax net will be widened in GST. When you widen tax net, there are chances of reduction in the general tax rate,” he added. He further told the news channel that there could be a revenue loss for states in the initial years but this loss will not continue for more than 3 years.
Yesterday, The Lok Sabha passed four key Goods and Services Tax Bills, rejecting amendments moved by the opposition. The Bills are related to Central GST, Integrated GST, UT GST and GST Compensation. Taking to Twitter, Prime Minister Narendra Modi wished the entire nation over the passage of the Bill. The Central GST deals with taxation related to Centre, integrated GST deals in the taxation of inter-state movement of goods and services while the Union Territory GST Bill covers taxation in Union Territories.
Replying to around eight hour-long debate, Finance Minister Arun Jaitley said the GST will replace various indirect taxes with a new tax regime which will ensure free flow of goods and services across the country. He said the goods will become slightly cheaper after the multiplicity of taxes is removed. He said the object of GST is to have one tax and each assessee with one assessing officer. Responding to members’ questions, the Minister said under the GST, for one commodity there will be only one tax rate in the country.
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The government has set a target of July 1 for the rollout of GST, which will subsume excise, service tax, VAT and other local levies. Once these Bills are cleared by Parliament, the states will then take the state GST Bill to their respective assemblies. S-GST has been prepared as a model of the central GST, with each state incorporating state-specific exemptions.