Advocating for the benefits of GST once it is launched, Finance Minister Jaitley in Lok Sabha today said that GST will do away with tax differences in the nation.
India moved a step closer to becoming a unified market in line with the federalist vision of the architects of its Constitution with the tabling in Parliament on Monday of the GST Bill, which extends pan-India except to Jammu and Kashmir.
- The compensation bill that was passed on Wednesday will ensure states get compensated for the first five years for the revenue loss after the GST rollout.
Moily also attacked government claiming that the GST mantra "one country-one tax " is a myth.
After Jaitley introduced the bills, the opposition, Congress and All India Trinamool Congress protested, saying they had not been listed in the day's agenda for the House.
Jaitley in detail explained the four bills-Central GST, Integrated GST, Union Territory GST and the Compensation Law-to the MPs and how these legislations would be beneficial, Kumar said.
It would consist of a four-tier tax structure of 5%, 12%, 18% and 28%, though there will be a provision to set the peak rate at 40% to deal with any financial emergencies.
Seven hours have been allotted for debate on GST today. The states have pooled in their sovereignty to the GST Council, and so has the Centre. "It is a kind of federal contract with consensus", he said.
"If somebody uses a BMW auto, then that can not be taxed at the same rate as Hawaii chappals or baby food", Mr Jaitley said.
Modi had said that the passage of these bills would lead to one tax regime for the entire country. The GST bills provide that sale of land and, sale of building except the sale of under construction building will nether be treated as a supply of goods not a supply of services. Although, Biju Janta DAl, MP B Mahtab speaking earlier said that it would be "illusory to expect too much".
Referring to tax bracket of luxury goods, he said the extra component beyond 28 per cent tax has been kept as cess as keeping it as tax would have negative impact on the consumers.
The compensation will be paid bi-monthly and the amount due would be calculated after considering a 14 per cent growth rate in taxes over the base year of 2015-16.
"The authority of law that Article 265 talks about are laws under Article 246 (a) that Parliament or state legislatures will frame on the recommendations of the GST Council", he said.
"It is not possible to have one single rate", he said.