7.5.15

Lok Sabha clears GST Bill

The constitutional amendment bill for rolling out the long-pending goods and services tax (GST) cleared the first hurdle as it was passed by Lok Sabha on Wednesday .
Now, the bill faces a tougher test in the Upper House, where NDA is in a minority , with opposition parties led by Congress demanding that it be sent to a standing committee.
Congress lodged its protest by walking out even as the bill, introduced by Pranab Mukherjee in 2011, was approved by 352 votes to 37.
Finance minister Arun Jaitley, who walked up to the opposition benches and thanked them after the bill was passed, had earlier assured states that the Centre would compensate them for any revenue loss and that the new uniform tax rate would be much less than the 27% recommended by an expert panel. The Narendra Modi government has set April 1, 2016 as the latest deadline for implementing GST, which will subsume excise, service tax, state VAT, entry tax, octroi and other state levies. But for that to happen, the constitution amendment bill needs to be cleared by Rajya Sabha and has to be endorsed by state legislatures. Subsequently , the Centre and states will decide on the tax rate and a GST Bill will have to be approved by Parliament.
With the BJP and its allies in minority in the Rajya Sabha, the bill is expected to face some stiff opposition as the Congress is determined to send it to a parliamentary standing committee. With most parties having made their stand clear, AIADMK, which has remained ambivalent on the issue, is crucial to the bill's passage.
Congress is also likely to rally parties from manufacturing states such as Tamil Nadu and Maharashtra as they have raised concerns of losing revenue. Conversely , the BJP is hoping for the support of parties from consuming states such as Uttar Pradesh and Odisha as they are likely to be gainers from the new tax regime.
The government would need at least 122 votes in the 243-member Upper House as the bill is required to be passed by twothirds of the total members present and voting, which cannot be less than the simple majority of the actual House's strength.

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