Finance Minister Arun Jaitley said GST would bring more transparency, better compliance, increase in gross domestic product growth and revenue collections
Union Finance Minister Arun Jaitley on Monday told members of Parliament the industry and the common man stood to gain from the rollout of a proposed goods and services tax (GST), besides state governments. Some MPs asked Jaitley to bring out a White Paper on the new tax system.
Speaking at a meeting of the Parliamentary Consultative Committee attached to his ministry, Jaitley said GST will help reduce tax-on-tax and will be beneficial to consumers. GST like state-level value added tax (VAT) is imposed on value addition in each stages of production and, hence, avoid cascading effect, or tax-on-tax.
"GST will benefit most of the states from Day 1, especially consumer states," he said, according to a statement issued by the finance ministry. GST is a destination-based tax imposed on products and services in the states where these are consumed.
Jaitley said GST would be beneficial to the Centre, states, industrialists, manufacturers, the common man and the country at large since it will bring more transparency, better compliance, increase in gross domestic product growth and revenue collections.
As the volume of trade expanded and growth momentum picked up, every state would benefit with the rise in their revenue collections, he added.
He said the Centre proposed to levy a non-vatable additional tax of one per cent on goods involved in inter-state trade which would be assigned to states. While this tax will be levied for two years, it could be extended if recommended by the GST council.
A Constitutional Amendment Bill on GST was introduced in the Lok Sabha on December 19. It would be taken up by Parliament in the next session.
The government intends to roll out GST, which will subsume most of the indirect taxes, from April 1, 2016. Jaitley also said the government was open to suggestions for making further improvements to the GST Bill.
"GST is a continuing process, which would further evolve and improve with time," the statement quoted him as saying.
In this regard, members made suggestions, including that the Centre brings out a White Paper, giving details on revenue to the Centre, states and who will be the ultimate beneficiaries. Clarity was also sought on whether the manufacturers, suppliers or consumers would be the ultimate beneficiary of the move.
A member also suggested the Finance Commission be made a permanent body for allocation of funds to states.
To remove apprehensions among states about the fall in their revenue collections, provisions had been made in the GST Bill, Jaitley said.
The government, Jaitley added, was in favour of strengthening the cooperative federalism and make all efforts to evolve as much consensus as possible on GST.
The minister also said the Centre would compensate states for any loss of revenue arising on account of implementation of the GST for a period of five years.
The statement said most of the committee members supported the decision of the government to implement GST.
"They said since the number of departments will also reduce in due course, which, in turn, will lead to less corruption," it added
Union Finance Minister Arun Jaitley on Monday told members of Parliament the industry and the common man stood to gain from the rollout of a proposed goods and services tax (GST), besides state governments. Some MPs asked Jaitley to bring out a White Paper on the new tax system.
Speaking at a meeting of the Parliamentary Consultative Committee attached to his ministry, Jaitley said GST will help reduce tax-on-tax and will be beneficial to consumers. GST like state-level value added tax (VAT) is imposed on value addition in each stages of production and, hence, avoid cascading effect, or tax-on-tax.
"GST will benefit most of the states from Day 1, especially consumer states," he said, according to a statement issued by the finance ministry. GST is a destination-based tax imposed on products and services in the states where these are consumed.
Jaitley said GST would be beneficial to the Centre, states, industrialists, manufacturers, the common man and the country at large since it will bring more transparency, better compliance, increase in gross domestic product growth and revenue collections.
As the volume of trade expanded and growth momentum picked up, every state would benefit with the rise in their revenue collections, he added.
He said the Centre proposed to levy a non-vatable additional tax of one per cent on goods involved in inter-state trade which would be assigned to states. While this tax will be levied for two years, it could be extended if recommended by the GST council.
A Constitutional Amendment Bill on GST was introduced in the Lok Sabha on December 19. It would be taken up by Parliament in the next session.
The government intends to roll out GST, which will subsume most of the indirect taxes, from April 1, 2016. Jaitley also said the government was open to suggestions for making further improvements to the GST Bill.
"GST is a continuing process, which would further evolve and improve with time," the statement quoted him as saying.
In this regard, members made suggestions, including that the Centre brings out a White Paper, giving details on revenue to the Centre, states and who will be the ultimate beneficiaries. Clarity was also sought on whether the manufacturers, suppliers or consumers would be the ultimate beneficiary of the move.
A member also suggested the Finance Commission be made a permanent body for allocation of funds to states.
To remove apprehensions among states about the fall in their revenue collections, provisions had been made in the GST Bill, Jaitley said.
The government, Jaitley added, was in favour of strengthening the cooperative federalism and make all efforts to evolve as much consensus as possible on GST.
The minister also said the Centre would compensate states for any loss of revenue arising on account of implementation of the GST for a period of five years.
The statement said most of the committee members supported the decision of the government to implement GST.
"They said since the number of departments will also reduce in due course, which, in turn, will lead to less corruption," it added
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