HISTORIC GST BILL PASSED IN RAJYA SABHA

Arun Jaitley addressing a press conference at Parliament House

In the biggest tax reform since Independence, the Goods and Services Tax (GST) Bill has been passed by the Rajya Sabha to replace a raft of different state and local taxes with a single unified value added tax system to turn the country into world’s biggest single market. The 66-year-old Constitution, which gives power to Centre to levy taxes like excise, and empowers states to collect retail sales taxes, was amended though the 122nd Constitution Amendment Bill. The changes aim to streamline India’s fragmented tax system with a single levy. The reform, which subsumes all indirect taxes such as sales tax and excise tax, is expected to bring down the tax rates as India becomes a single market, allowing seamless flow of goods across state borders. The GST will increase tax compliance as it has an in-built self-policing system, which will in turn increase the tax revenue of the government.