‘Revolutionary’ GST will herald ‘economic unification’ of India :Jaitely

06 July, New Delhi

Union Finance minister Arun Jaitely Thursday said by implementing the Goods and Services Tax ie the GST, the biggest tax reform in the country on June 30 , the government has brought the entire country under one tax system.

He was speaking at the birth anniversary celebrations of Dr Shyama Prasad Mukherjee, politician and founder of Bharatiya Jana Sangh at a function here.

Calling him a leader to the core, Jaitely said,”Dr Mukherjee will be remembered more as a symbol of unity than a barrister or a political figure.But he served the nation with dedication and will be remembered by generations as a mass leader.”Recounting the benefits of GST and why the nation needed it, Jaitely said,” India was economically fragmented since past seventy years. There was no economic integration with all the states having theirown tax structure and their rules and regulations to collect taxes and impose taxes. With GST, the wholecountry will be bound with “One tax” implying all the states will have one tax structure.

There will beuniformity and India will be “One nation one tax” Jaitely further informed that in the year 2003 , a proposal was brought under consideration of all the state governments by the Atal Bihari government to bring GST. But with change in governance at the Centre in 2004 , the matter was put aside, However, in 2006, the then Finance Minister Chidambaram announced that they would implement it in 2010. But due to some reasons it never got the green light until Modi ji did it on June 30, this year.

Explaining his point by giving examples, Jaitely said,” a consumer while buying a particular product was paying 17 different types of taxes and 23 hidden cess. Moreover, a product’s cost was different inlets say Karnataka from that in Chennai. But with GST , this difference will be dispensed with.”

Arun Jaitely cleared that the “Destination state” that is from where the product is bought or where the final commodity reaches gets the benefit of the GST and not the “Producing state” . The “Producing state” is at loss since it has to bear all the taxes. Therefore, the states expressed resentment regrading its implementation. Then , the Centre assured them that it would compensate for the losses incurred for the next five years. Following the assurance, all state governments nodded to union’s call.

Stating that the passing the bill was an uphill task, Jaitely said,” The bill was introduced in the Parliament with amendments. A law was formed. The Centre formed its own law and the states went their own way.

A GST council was formed and with majority , it was passed in the House. The process took decades.But the state of Jammu and Kashmir refused to abide by it with separatists saying that approving GST would tantamount to ‘financial integration’ with the Indian government and the state would lose its sovereignty.

” CM Mehbooba Mufti was convinced that the mainstay of the state is tourism and handicrafts and not manufacturing and the state would miss the ‘bus.’ The J&K assembly passed the bill then and one more mile stone was achieved,” the minister remarked.

”Every state would benefit and especially those states where there is minimal manufacturing and are economically weak. Consumption states are the target,” said the minister.

”GST will change the nation. It would make the system easier, tax collection would be simpler, graft would be considerably curbed , commodities would be cheaper and there would be less confusion in thesystem,” Jaitely concluded.

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