NEW DELHI: Paving the way for initiation of major taxation reforms in the country, the Rajya Sabha on Wednesday, with an overwhelming majority, passed the Constitution (122nd amendment) Bill - an enabling legislation for the introduction of the Goods and Services Tax (GST) Bill. The final voting for the bill had a perfect score of 203/203.
The Congress, along with all other opposition parties barring the 13 AIADMK MPs who staged a walkout just before the bill was put to a vote, supported the legislation for the introduction of a single tax across India.
Finance Minister Arun Jaitley hailed the bill as one of the most significant tax reforms in India in recent history, which has been brought in after a “broad consensus” with various political parties.
Terming the passage of the legislation as “truly historic”, Prime Minister Narendra Modi thanked all political parties for extending their support to the bill and said, “I would like to add that GST will also be the best example of cooperative federalism. Together, we will take India to new heights of progress.”
“Our MPs must be congratulated on their path-breaking decision to give India an indirect tax system for the 21st century...we continue to work with all parties & states to introduce a system that benefits all Indians and promotes a vibrant and unified national market,” the PM said in a series of tweets.
The debate, which went on for over seven-and-a-half hours and drew participation from over 40 speakers, saw some of the finest speeches about the nitty-gritty of the legislation.
If it was legal eagle and Finance Minister Arun Jaitley who charted the bill in the house, it was P Chidambaram from the Opposition side who led the charge against it. The exchanges between the two over the usage and drafting of the bill, which Chidambaram termed “clumsy”, prompting a retort from Jaitley who quoted debates from the drafting of the Constitution, had the house enthralled.
All opposition parties praised Chidambaram for articulating his view, while treasury benches credited Modi and Jaitley for the bill. To mark the occasion, Jaitley cut a cake in his chamber in the presence of ministers, party MPs and mediapersons.
The bill, first mooted in 2005 during the UPA regime, was introduced in Parliament in December 2014. The Lok Sabha passed it in May 2015. It was then referred to the Select Committee after being introduced in the Rajya Sabha, where the government lacks a majority.
The AIADMK on Wednesday opposed the GST bill and staged a walkout as Finance Minister Arun Jaitley winded up the debate on the Constitution 122nd Amendment Bill. Describing it as “anti-constitutional”, party MP A Navaneethakrishnan said it violates federal autonomy.
He said GST will lead to “permanent” revenue loss for the State, adding that party chief J Jayalalithaa had made representations to the Prime Minister with concerns over GST. “The Bill violates Article 21 and the basic structure of the Constitution,” he said.
Earlier in the day, former finance minister P Chidambaram, who initiated the debate, suggested introducing the uniform tax while strongly recommending capping the standard rate of GST at 18 per cent. He said GST is an indirect tax and indirect taxes are “regressive” in nature. The trend is to “keep them as low as possible”. If the Centre decided to keep them at a high of 24-25 per cent, then it will defeat the purpose of GST.
Chidambaram insisted on incorporating the GST rate in the Constitution Amendment Bill so that it can’t be levied as per the whims and fancies of the executive. He said the Congress was never opposed to GST but the provisions of the bill. “GST not only stands for Goods and Services Tax but also for Good Sense Triumphs”, he said.
For his part, Finance Minister Arun Jaitley said the guiding principle would be to keep the rates as low as possible, certainly lower than what it is today. “As we stand today, the political objective is very clear. The rate has to come down, the rate must be reasonable. We will try for the most reasonable rate,” said Jaitley.
Before the passage of the Constitution Amendment Bill, Congress insisted on an assurance by the government that the CSGT and IGST would be treated as a finance bill and not a money bill. Responding to this, Jaitley said, “We have absolutely no intention, in any way, to bypass the Constitutional provisions as far as requirements of the bill are concerned. We will fully comply with the Constitution and precedence.”
He added that it would be “unreasonable” to give an assurance since he was not aware of the content of those bills, neither had the GST Council discussed the issue and nor was there any such precedence.