Parliament passes Bills to pave way for GST

The Rajya Sabha on Thursday cleared four goods and services tax (GST) Bills. Now, the President’s consent and approval of the Assemblies are required for clearing all legislative hurdles, before the unified indirect tax regime is rolled out. 

Before passage of the Bills, Finance Minister Arun Jaitley sought to allay the Opposition’s apprehension over the requirement of multiple registrations for companies and powers to arrest given to officials under the proposed GST rules.

Even as states clear their Bills, the GST Council will take up fitment of items in five slabs of GST rates and the four pending rules at its meeting on May 18 and 19 in Jammu and Kashmir. The Bills passed by Parliament, however, do not come into effect in the state because of special Constitutional rights.

The Lok Sabha also passed the Taxation Laws (Amendment) Bill, 2017, to ensure continuance of levy of excise on petroleum products and abolition of cess on some other items following the GST roll-out, the target date for which is July 1.

Replying to a debate on the Bills, Jaitley said those evading taxes up to Rs 5 crore could be arrested, but the offence would be bailable. For more than Rs 5 crore, the arrest would be unbailable. 

Explaining the reasons for this, Jaitley said in the Council, there were different views on the arrest provisions: Some states did not want it; others wanted it for large amounts such as Rs 100 crore. “The Council took a middle path,” he said. Bahujan Samaj Party member Satish Chandra Misra sought clarity on when the non-bailable arrest provision could be compounded under the GST law. 

Jaitley said compounding was at the time of proceedings; arrests would be prior to that.

Congress’ Anand Sharma said he was concerned about multiple registrations under the proposed GST regime. He said there should be a centralised registration authority, and also a single assessment audit and advance ruling. 

Jaitley said multiple registrations would not be difficult because it would be electronic. The bigger problem was auditing of the same companies by different states. To mitigate this, there was a provision of joint audit by central and state officials.

Sharma’s party colleague Digvijaya Singh said businesses would have to file 37 tax returns in a year against the current four. Jaitley replied online filing would be convenient. 

Jaitley answered criticism of GST Network’s (GSTN’s) shareholding pattern by pointing out that the information technology (IT) system would match a billion vouchers every month. The Centre and the states have 24.5 per cent equity each in GSTN, while the rest is with banks and other financial institutions. 

He said increasing the government’s equity marginally was not an issue, but the flexibility of the GSTN was important. In the 14-member board of the GSTN, governments had seven members, three were from banks and financial institutions and four were independent, nominated by the governments. So, in key decisions, the governments’ permission was required. 

Communist Party of India (Marxist)’s Sitaram Yechury wanted to know if an agriculturalist selling “ghee” was required to register under the GST regime. He also sought clarity on disparity among states.

Jaitley said such items were exempted under the GST, and assured the new tax regime would benefit consuming states.

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