Finance minister Arun Jaitley said, “The goods and services tax (GST) will be rolled out from June 30 midnight.” Adding, “The economy will have to face short-term challenges in implementing the biggest tax reforms since Independence.”
The GST was proposed by the previous Congress-led government of Dr Manmohan Singh, but it was stalled by political gridlock over basics of the proposal including how tax revenue would be collected and divided between the states and the centre.
While addressing the media in New Delhi, Jaitley said the official GST launch will take place on the midnight of June 30 at a function which will be organised in Central Hall of Parliament.
President Pranab Mukherjee, who had piloted the first Constitutional Amendment Bill to bring in GST in 2011 when he was finance minister with the previous UPA regime, will share the dais with Prime Minister Narendra Modi on the occasion.
Also on dais will be former prime minister Manmohan Singh and HD Deve Gowda, apart from Vice-President Hamid Ansari and Lok Sabha Speaker Sumitra Mahajan.
Jaitley said, “All Lok Sabha and Rajya Sabha Members of Parliament have been invited as also chief ministers and state finance ministers.” Adding, “All the members — past and present — chairmen of the GST Council and the Empowered Committee of State Finance Ministers have been invited.”
More in his speech, he pointed out the following matters:-
- GST over the medium to long term will lead to a rise in revenues of the Centre and states as the size of the formal economy will grow.
- GST being a more efficient system will also result in better tax compliance.
- However, in the short term, there will be some challenges in switchover to GST, so must be prepared for short-term challenges on GST rollout.
- A number of household items are set to get cheaper with the revised GST rates.
- There will be four tax slabs – 5, 12, 18 and 28 percent.
- GST could add two percentage points to economic growth.
- It aims to subsume the various central and state taxes that are currently levied on goods and services, bringing India under a uniform tax regime.
Mr Jaitley repeatedly said that the GST launch would not be delayed as requested by some states.
Besides, FM addressed on the anti-profiteering clause in the GST law
- that the provision has been made as a deterrent which is not intended to be used unless forced to.
Asked about industry bodies
- talking about small and medium enterprises not being prepared for the switchover to GST,
- Jaitley said July 1 as the rollout date has been announced well in advance and
- so nobody had any business not to be ready.
- Besides, additional time has been given in the initial period for filing of the results,
- thus giving enough time to prepare for the transition, he said.
At press briefing, Jaitley said
- the industry needs to prepare itself for the switchover to GST and
- it’s not a complicated process.
- More than 6.5 million businesses have already signed up for the GST,
- that’s more than four-fifths of those already registered to pay India’s old business taxes.
- Companies will be allowed to file late returns for the first two months
- so that they can adapt to a new online filing system.
- The strict GST filing timetable will apply from September.
- With company owners using their personal tax numbers to comply with the GST, the government expects income tax dodgers to have to come clean.
- Only around 3 percent of people in India pay income tax.
- There have been concerns about the preparedness of the GST Network,
- the IT system that marks a technological leap forward for India
- it will be driven by an IT back end that can process up to 5 billion invoices a month.
- The tax reform also poses a huge challenge with tax collectors needing to be trained and
- companies brought up to speed on a levy that experts say will force them to overhaul business processes from front to back.
- The GST, India’s most ambitious tax reform,
- replaces an unwieldy patchwork of tariffs and
- creates a single economic zone with common indirect taxes
- something that neither the European Union nor the United States can boast.
Highlights of launch program –
which will be held late on June 30 in the central hall of Parliament:
- GST launch will take place exactly at midnight of June 30 and July 1
- when the switch over to the new regime takes place.
- There will be a 1-hour program at the launch.
- All decisions by GST Council have been taken with consensus; All states have passed GST laws except Kerala & J&K.
- GST will be launched in the presence of President Pranab Mukherjee, Prime Minister Narendra Modi, Vice President Hamid Ansari, Speaker of the Lok Sabha Sumitra Mahajan, Former Prime Minister Manmohan Singh and HD Deve Gowda.
- All members of the Parliament, GST Council, Chief ministers and Officials who have assisted in the process
- have all been invited to grace the occasion.
- There will be two short films that will be screened at the launch.
- GST is touted as the single biggest tax reform since India’s independence in 1947.
- It is expected to add 2 per cent to India’s GDP.
- Indirect taxation will undergo huge change post GST
- Over 65 lakh businesses have already signed up for GST.
- We intend to stick to FRBM & Fiscal deficit targets.
- Centre not considering farm loan waiver, will adhere to fiscal targets.