GST launch: India is ready for the Goods and Services Tax now.
GST rollout: India is ready for the Goods and Services Tax now. The rollout of the biggest tax reform in the country may cause some initial trouble but it is the idea whose time has come. Modi government has called a special joint midnight session of Parliament to launch the historic law today. Meanwhile, politics is heating up over GST launch as several opposition parties including the Congress have decided to skip the midnight event. Even as they protest now, a year after the law was passed unanimously by Parliament, GST journey couldn’t have been complete without their contribution over the years.
Here we take a look at all the men who brought the GST to India:
Atal Bihari Vajpayee: The need to move India from a multi-layered taxation system to a ‘One Nation, One Tax’ was first deliberated during Prime Minister Atal Bihari Vajpayee regime, who approved GST for the first time in 2000.
IS Patel, Bimal Jalan and C Rangarajan: The three former RBI governors were part of the economic advisory panel of Vajpayee. During a meeting with the then PM, the three former governors discussed at length and proposed the idea of GST.
Asim Dasgupta: A leader of the CPI-M and then West Bengal finance minister, Dasgupta chaired the first committee to design the GST model. The committee was formed by Vajpayee, who personally spoke to then West Bengal CM Jyoti Basu to allow Dasgupta to take up the job. Dasgupta worked on the GST Model until 2011. In 2010, he had said that around 80% GST work was complete.
Jaswant Singh: As the then finance minister in Atal Bihari Vajpayee government, Jaswant Singh played an important role in bringing GST to the country. In 2003, Singh approved a proposal to set up a Task Force for Implementation of the FRBM Act, 2003, headed by finance secretary Vijay Kelkar. This committee advised the government to move to the GST regime.
Vijay Kelkar: The then finance secretary headed the Task Force for Implementation of the FRBM Act, 2003. This included all Secretaries of his Ministry — Revenue, Expenditure and Finance — and the Chief Economic Adviser. The committee was also working on a project on building a Tax Information Network (TIN) aimed at bumping India’s low tax base and its ratio of tax-to-GDP, according to The Indian Express.
Kelkar Committee studied models of countries like Canada, Australia and Brazil and also consulted several stakeholders. In July 2004, the committee advised new government led by Manmohan Singh to integrate the taxation of goods and services. The committee suggested that a new taxation system would be simple, with a low tax rate to encourage compliance, and boost output and efficiency.
The Kelkar Committee also recommended a single tax rate of 7% for states and 5% for the central government — in effect a 12% rate for most commodities. It further told the government that an Indian Goods and Services Act could be effective from April 1, 2005.
Manmohan Singh: The GST was taken forward for 10 years under the Manmohan Singh government. After coming to power, he commissioned the National Council for Applied Economic Research to work on a model to make projections across various scenarios. After losing the PM chair to Narendra Modi in 2014, Singh also played an important role in breaking the logjam between government and the opposition over GST.
P Chidambaram: As Finance Minister, P Chidambaram announced his aim in the 2005 Budget to cover India’s entire production-distribution chain by a national VAT or a Goods and Services Tax. In 2006 Budget, Chidambaram set April 2010 as the deadline for GST rollout.
In 2009, the Finance Ministry released first discussion paper on GST.
Pranab Mukherjee: In 2011, the new Finance Minister Pranab Mukherjee, now the President of India, introduced a Bill to provide enabling framework for GST. According to Chidambaram, this draft Bill was the “best” of what was introduced on GST so far.
Yashwant Sinha: As the opposition protested GST Bill, the draft was sent to the Parliamentary Standing Committee chaired by Sinha, also a former finance minister in Vajpayeee government. The panel proposed some changes.
Sushil Modi: As Mamata Bannerjee toppled Left front government in West Bengal, Dasgupta resigned, He was succeeded by then Bihar finance minister Sushil Kumar Modi. In 2013, Chidambaram came back to Finance Minster after Mukherjee moved the Rashtrapati Bhavan. Chidambaram provided for Rs 9000 crore to states as compensation. However, the government’s efforts were stymied by BJP-led states including Gujarat, then led by Narendra Modi.
KM Mani: In 2015, Sushil Modi was replaced by then Kerala Finance Minister KM Mani as the head of empowered committee of state finance minsters on GST.
Narendra Modi: After coming to power in 2014, PM Narnedra Modi took special interest in GST, though he had opposed it earlier. He will now launch the GST along with President Mukherjee at a special midnight joint session of Parliament.
YV Reddy: The Finance Commission headed by Reddy recommended a compensation of Rs 50,000 crore to states against potential revenue losses.
Arun Jaitley: In 2015, finance minister Arun Jaitley said Modi government was keen on introducing GST by 2016. BY May 2015, Modi-Jaitley managed to get the GST Bill approved by Lok Sabha. They reached out to the opposition in 2016 and the Bill was finally approved by both Houses of Parliament for July 1, 2017 rollout.