GST Launch 2017: A milestone in cooperative federalism, says PM Modi
The much-awaited Goods and Services Tax (GST) was rolled out from midnight tonight from the historic Central Hall of Parliament in the presence of President Pranab Mukherjee, Prime Minister Narendra Modi, finance minister Arun Jaitley and other Cabinet ministers, many chief ministers and senior government officials.
The GST has replaced more than a dozen central and state taxes or Value Added Tax (VAT) with an aim to create a seamless unified market for the $2 trillion Indian economy.
Here are the live updates to the GST launch:
President Pranab Mukherjee said the ambitious central tax is a “tribute” to the maturity and wisdom of India’s democracy.
“The new era in taxation, which we are about to initiate in a few minutes, is the result of a broad consensus arrived at between the Centre and states,” Mukherjee said minutes before the GST roll-out in his speech at a special function in the central hall of Parliament.
“This consensus took not only time but also effort to build. The effort came from persons across the political spectrum who set aside narrow partisan considerations and put the nation’s interests first. It is a tribute to the maturity and wisdom of India’s democracy,” he said.
“It is also a moment of some satisfaction for me because, as the Finance Minister, I had introduced the Constitution Amendment Bill on 22 March 2011,” he said.
“It is similar to the introduction of VAT when there was initial resistance. When a change of this magnitude is undertaken, however positive it may be, there are bound to be some teething troubles and difficulties in the initial stages,” he said.
Mukherjee said these issues have to be solved with understanding and speed to ensure that they do not impact the growth momentum of the economy.
“Success of such major changes always depends on their effective implementation. In the months to come, based on the experience of actual implementation, the GST Council and the Central and state governments should continuously review the design and make improvements, in the same constructive spirit as has been displayed till now,” he said. (PTI)
Prime Minister Narendra Modi today termed the GST as a ‘good and simple tax’ which will end harassment of traders and small businesses while integrating India into one market with one tax rate.
In the historic Central Hall of Parliament, Modi said the indirect tax reform is a result of combined efforts of various political parties at different points of time.
GST, he said, is an example of cooperative federalism as the centre and states together thrashed out the new law with consensus.
Besides being a transparent and fair system that will end generation of black money and corruption, GST will promote new governance culture that will end harassment at the hand of tax officials.
Touching upon initial teething troubles that may be witnessed because of unification of more than a dozen central and state levies into one and switching over to a new online return filing system, Prime Minister said even eyes have to adjust for a couple of days when a sight corrective spectacles are worn.
Modi said GST will eliminate the compounding effects of multi-layered tax system. (PTI)
Finance minister Arun Jaitley today said rollout of the GST will ease inflation, make tax avoidance difficult and boost GDP growth.
Addressing the midnight launch event of the GST in the Central Hall of Parliament, Jaitley said the implementation of the landmark unified tax should be seen as the beginning of a new journey that will expand the country’s economic horizon.
He further said that 17 transaction taxes in states and centre and 23 cesses would be subsumed in GST. An assessee will have to file only one return.
“Inflation will come down, tax avoidance will be difficult, India’s GDP will be benefited and extra resources will be used for welfare of poor and weaker section,” Jaitley said.
India is making history with the launch of GST, which is the biggest and most ambitious tax and economic reform in its history, the finance minister said.
“The old India was economically fragmented. New India will create one tax, one market, one nation. It will be in India where Centre and states work together towards the common goal of shared prosperity,” Jaitley said.
Terming GST as an important achievement for the country, he said not only will India write a new destiny, the new tax regime would also strengthen federalism.
“The Constitution says India is a union of states. The union is strong if both Centre and states are strong. That is the real meaning of cooperative federalism.While enacting the GST, neither the states nor Centre gave up their sovereignty. They have pooled their sovereignty to make joint decisions in indirect taxation,” the finance minister said.
In a large and complex federal system of multi-party democracy with Centre and 29 states and 2 UTs, Jaitley said India has implemented a constitutional amendment and brought in a large tax reform.
“We have done this at a time when world is facing a slow growth, isolationism and lack of structural reforms. With the GST, India has showed that these forces can be overcome through display of inclusion, openness and boldness,” he said.
He appreciated the efforts of all members of parliament, state finance ministers and officials in making GST a reality when many had expressed doubts whether it could be implemented from 1 July.
Jaitley also recalled the initiatives taken by his predecessors, including the then finance minister Pranab Mukherjee. He recalled the contribution of former finance Yashwant Sinha and former economic affairs secretary Vijay Kelkar.
“All decisions of GST Council were taken uninamously...We did not want to burden common man and weaker section,” Jaitley said.
Rollout of the Goods and Services Tax is “historical” as it will bring about a revolutionary change in the country, Maharashtra Chief Minister Devendra Fadnavis said today, hours ahead of the high-profile event in Delhi to mark the transition to the new tax reform.
“One nation, one tax, one market will come into effect with the rollout of GST. The taxation system will make trading easier. While Maharashtra will benefit from GST, other states too will benefit a lot and our economy will get a boost,” Fadnavis said in a statement issued. (PTI)
With the Goods and Services Tax (GST) coming into effect , rail passengers will have to pay a little more to travel AC and first class. Service tax on AC ticket charges will be hiked from 4.5% to 5%, an increase of 0.5%, after the GST implementation. Similarly, GST on transport of goods by rail will be 5% in place of service tax of 4.5% levied earlier with exemption for essential goods like milk and agriculture produce. Service tax is levied only on AC and first class fares in the Railways. (PTI)
Union minister M Venkaiah Naidu today said there would be some “initial hiccups” in rolling out the Goods and Services Tax (GST), but those can be addressed. (PTI)
Consumers will have to shell out more for banking services, insurance premium payments and credit card bills with GST rollout from Saturday. ATM withdrawals, debit card transactions, fund transfers too will cost more.
Prices of branded garments would go up from Saturday in line with the 12% GST rate on garments priced above Rs1,000. Those that cost less than Rs1,000 will be taxed at 5% and could be priced lower.
Power Minister Piyush Goyal today said that GST rollout is a transformational move aimed at increasing revenues that will bring down the taxes in future. (PTI)
Assam chief minister Sarbananda Sonowal today said Goods and Services Tax (GST) will bring a paradigm shift in the entire indirect tax system. The single point single tax will benefit consumers of the country, he said. In a statement in Guwahati, Sonowal said “With introduction of GST, the countrymen will be relieved of multiple tax terrorism, which has been haunting the people since Independence. (PTI)
Union minister Rajiv Pratap Rudy today said the GST roll out will boost hiring across sectors by 11% by creating an integrated national market which will promote domestic demand and drive job creation.
The GST Council today reduced the GST rate on fertilisers to 5% from 12% because of apprehensions of rate of crop nutrient going up. At present, taxes on fertilisers are in the range of 0-6% in different states. Retail price of urea, which is fixed by the government, is at Rs5,360 per tonne now. The prices of DAP and potash, fixed by private companies, are at Rs22,000 and Rs11,000 per tonne, respectively. (PTI)
“Parties should rise above partisan politics. The Congress party had the opportunity to rise to the occasion. The challenge before the Congress party is now that they have to decide whether they will take fringe positions or will choose mainstream position,” Jaitley told Aaj Tak GST Conclave. (PTI)
NITI Aayog member Bibek Debroy today said any suggestion that the goods and services tax will boost GDP growth by 1-1.5 % is “utter rubbish”, terming it as an “imperfect GST” following changes from the originally proposed “ideal” structure.
The effective GST rate on under- construction real estate projects will be 12% only and not 18% as there will be abatement for land cost, according to tax consultant EY.
Realtors’ body CREDAI President Jaxay Shah also said that the effective GST rate would remain at 12% and assured that as per the law, the developers would pass on the benefits of input tax credit to home buyers. Tthe government hiked the GST rate for the construction sector to 18% from 12% but removed land value from computation of tax liability. (PTI)
Niti Aayog CEO Amitabh Kant has said implementation of GST will make India a formal, easier and simpler, and a more revenue generating economy.
GST Network today launched an offline Excel based format for traders and businesses to upload sales data on the GST portal. The Excel template, comprising eight worksheets, is part of GST Network’s approach to make tax compliance easy and convenient for taxpayers and also reduce the time of compliance. As per the GST law, a return of all sales or trade made in a month have to be filed online by the 10th of the following month.
