GST rates will have no inflationary impact: Jaitley

  • GST rates will have no inflationary impact: Jaitley

GST rates will have no inflationary impact: Jaitley

Centre's Finance Minister Arun Jaitley started GST bill debate today in the Lok Sabha.

Central GST, Integrated GST, Union Territories GST and the compensation law - were approved by the cabinet earlier this month.

During Congress Government Bhartiya Janta Party Opposed the Bill.But now opposition's objection to a GST with multiple rate slabs, the Finance Minister said, "If there are no multiple rates, it will become a highly regressive tax..." The government also hopes the new taxes will broaden its revenue base and cut compliance costs for companies.

Prime Minister Narendra Modi congratulated the countrymen on passing of GST Bill in Lok Sabha.

Lok Sabha is not bound by any law to include amendments in a Money Bill proposed by the upper house of the Parliament.

Now if a luxury vehicle has 40 per cent tax and cigarette has 65 per cent tax, they will be put in the 28 per cent slab and the remaining difference will be charged as cess to compensate states for any revenue loss, Jaitley said.

The GST was introduced as The Constitution (One Hundred and First Amendment) Act 2016, it will subsume various taxes like, central excise, service tax, VAT and other local levies to create a uniform market across India.

It provides for constituting an authority to examine whether input tax credits availed by any registered taxable person, or the reduction in the price on account of any reduction in the tax rate, have actually resulted in a commensurate reduction in the price of the said goods and/or services supplied by him.

Four GST legislations are Central GST, Integrated GST, Union Territory GST and Compensation GST.

He added that there will be four tax rates with the highest being 28 percent but luxury products and tobacco products will attract more GST. Terming the GST bill to be a "revolutionary" bill, Jaitley said that it was going benifit all.

Moily said, "There are too many tax rates..."

Participating in the debate, BJP member Udit Raj said the GST would bring about uniformity in the tax system and be immensely beneficial to the 1.2 billion people of the country.

The states will have to get the state GST Bills passed by their respective assemblies.

Union Home Minister Rajnath Singh also expressed his happiness over the same, saying that with GST being passed, India will see growth in its GDP directly affecting employment.

"This would also be dependent on the rate fixation committee which is expected to finalise its recommendations in April", Mani said.