The Rajya Sabha on Wednesday night August 03,2016 passed the bill to amend the Constitution to facilitate the historic GST after the government's assurance that the tax rates would be kept "reasonable".
The Goods and Services Tax Amendment Bill was passed after a 7-hour debate in the Upper House, during which the Congress led by former finance minister P Chidambaram tried to corner the government with two demands - that there should be a cap on the standard GST rate at 8%, and that IGST and CGST Bills will not be passed as money bills but as financial bills
Finance Minister Arun Jaitley nimbly sidestepped the demand saying he would strive for a "reasonable" GST rate. he also argued that the government cannot give any commitment on the nature of bills that are not yet been drafted.
It will now go back to the Lower House to incorporate the amendments approved by the Rajya Sabha.
The bill will also have to be approved by 50 %of all the state assemblies.
The easy passage was facilitated after the main opposition party Congress, which had been stalling the measure for over two years, came on board after the government made about 6 changes in the bill, including scrapping of 1 % manufacturing tax and incorporate clearer provisions for compensating states for revenue loss for five years.
AIADMK was the only party to oppose GST Constitution Amendment Bill and its members staged a walkout from the House to register their unhappiness over the bill which lays the ground for rollout of uniform Goods and Services Tax (GST) regime that will subsume all indirect taxes including central excise duty and state VAT/sales tax.
Hailed as the biggest tax reform since independence, the one-nation-one-tax regime will convert 29 states into a single market.
The GST will be implemented from April 1, 2017. It is expected to add 2 percentage points to India's GDP, according to economists.
The adoption of the GST regime will make manufacturing cheaper, leading to lower prices of a number of manufactured goods.
On the other hand, services are likely to become costlier under the GST.
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