Lok Sabha to debate GST bills today
29 Mar 2017
The Lok Sabha today began a marathon seven-hour discussion on the Goods and Services Tax that will herald a unified national market - the biggest tax reform in the country since independence.
Finance minister Arun Jaitley on Monday moved four enabling legislations - the Compensation Law, the Central-GST (CGST), Integrated-GST (IGST) and Union Territory-GST (UTGST) – in the Lok Sabha aimed at rolling out the much-awaited tax reform.
The GST, which the government intends to roll out from 1 July 2017, will subsume a host of taxes such as central excise, service tax and state VAT and local taxes among other indirect levies on manufactured goods and services across the country.
It is estimated that the rollout of the GST will help boost the country's economic growth (in terms of gross domestic product) by up to 2 per cent.
Passing of the laws in the current session of Parliament is a must to meet the 1 July deadline as the centre and the states will otherwise lose their right to collect indirect taxes after 15 September.
Briefing legislators on the legislation ahead of the debate, finance minister Arun Jaitley on Tuesday said the passage of the bills, which were introduced in the Lower House, will result in "one-nation, one-tax" regime.
The approval of Parliament, coupled with separate nods by all the state assemblies, will complete the legislative process for the rollout of the reform.
The GST Council has already approved four-tier tax slabs of 5, 12, 18 and 28 per cent plus an additional cess on demerit goods like luxury cars, aerated drinks and tobacco products.
The work on for putting various goods and services in the different slabs is slated to begin next month.
However, the debate is likely to be stormy as Opposition MPs had protested against the manner in which the bills were introduced in Parliament on Monday. They said they were not given enough time to study the proposed legislation.
The new tax, once passed and introduced on 1 July, will start attracting the Goods and Services Tax on a host of transactions such as leasing of land, renting of buildings as well as EMIs paid for purchase of under-construction houses.
Reports say that even a free lunch, car pickups and drops, scholarship to employee's children, that are normally not part of the CTC package, can attract GST.
However, gifts not exceeding ''Rs50,000 in value in a financial year by an employer to an employee shall not be treated as supply of goods and services'', says a Times of India report.
The Central GST (CGST) bill -- one of the four legislations introduced, states that any lease, tenancy, easement, licence to occupy land will be considered as supply of service.
Sale of land and buildings will be however out of the purview of GST, the new indirect tax regime.
Such transactions will continue to attract the stamp duty, according to the legislations finance minister Arun Jaitley introduced in the Lok Sabha yesterday for approval.
Electricity has also been kept out of the ambit of GST.
The GST rate on housing is expected to be pegged at 18 per cent.
Rent from residential premises may be exempted from GST.
