NEW DELHI: Questioning the Congress Party’s position on GST, Union Finance Minister Arun Jaitley has said that the former should accept and seriously introspect after having ruled the country for the longest period of time that negativism hurts the country.
In his article ‘Dissent or Disruption – The Congress Party’s Position on GST’ posted on the social networking site, Jaitley said it was the Congress-led UPA Government that proposed the GST in the 2006-07 Budget.
“The Constitution amendment was piloted by the UPA. The changes suggested by the Empowered Committee and the Standing Committee were accepted by the UPA Government. The present Government has not made any significant modifications to the same except to bring a consensus between manufacturing and the consuming States. The State Governments belonging to the Congress Party have consistently supported the proposal. Is it only out of an obstructionist attitude that the Congress Party has adopted a negative role? Since Parliament is not functioning and there is no way to clarify these points before the same, I am constrained to place the above facts in public domain,” said Jaitley.
“The Congress Party and its leader may be upset with the Government for political reasons. They may be upset with the electorate for the 2014 verdict. The Congress Party should accept and seriously introspect after having ruled the country for the longest period of time, that negativism hurts the country. Should its obstructionist tendencies inflict an economic injury on the country?” he added.
The Finance Minister said the report of the Select Committee on the Goods and Services Tax has been submitted to the Rajya Sabha.
“The Constitution Amendment Bill has already been approved by the Lok Sabha. The Select Committee has recommended a five year compensation to the States which suffer any revenue loss on account of introduction of the GST,” he added.
Jaitley said the proposal for introduction of GST was first mooted by P. Chidambaram in his Budget Speech for the year 2006-07.
“After detailed deliberations and negotiations in the Empowered Committee of State Finance Ministers, the 115th Constitution amendment Bill, 2011 was introduced by Shri Pranab Mukherjee, the then Finance Minister. It was referred to the Parliamentary Standing Committee which submitted its report in August, 2013. The Bill, however, lapsed with dissolution of the Fifteenth Lok Sabha,” said Jaitley.
“Thereafter, the NDA Government again held negotiations with the Empowered Committee and after an overwhelming consensus, introduced a bill incorporating certain changes which had also been recommended by the Parliamentary Standing Committee. The near unanimous recommendations of the Empowered Committee, which were entirely supported by Congress ruled States, enabled the preparation of the eventual Bill to amend the Constitution which was introduced by me as 122nd Constitutional Amendment Bill,” he added.
Jaitley said the rationale of the Bill is to simplify the complex indirect tax structure in the country.
“The present system involves multiplicity of taxes, absence of uniform rates of taxation, and the cascading effect of “Tax on Tax”. It is also an impediment in the seamless transfer of goods and services across the country. The GST simplifies the indirect tax regime. It seeks to reduce cost of production, inflation, multiplicity of taxes and uneven taxation rates. Significantly, it also creates an eco system for seamless movement of goods and services across the country and cuts down transaction costs. It will broaden the tax base, result in better tax compliance and eventually increase the country’s GDP. The GST resulting in better compliance will improve the revenue of the States and certainly do justice to a large number of lesser developed States in the country. It is for this reason that most State Governments and regional parties are supporters of the GST,” he added.
Pointing out the opposition dissent, Jaitley said the three members of the Congress Party have circulated a note of dissent to what is otherwise a consensus report of the Select Committee.
The Finance Minister also commented on each of the points raised by the Congress Party in its note of dissent.