Jaitley says GST is necessary to make India unified market and have cheaper goods

Finance Minister Arun Jaitley has said that rolling out GST will make India a common market, prevent tax-on-tax and would be helpful in making goods and services cheaper.

He was speaking at a conference organised by the Institute for International Economic Studies, when he expressed his hope that opposition party Congress will come on board so that India's biggest indirect tax reform bill since independence can be passed in the upcoming monsoon session of Parliament. He added that in case that didn’t happen, the government will have no option but to seek for a Parliamentary vote.

"The whole world is looking at India as to when India rationalises its indirect tax regime," he said.

The GST Bill, which aims to have a single national sales tax to replace several state and central taxes, is already approved by the Lok Sabha, while it awaits approval from the Upper House since the government doesn't have a majority there.

"The idea behind the GST is to make India into a one common market to have a seamless transfer of goods and services, to prevent tax-on-tax, make goods and services cheaper and therefore provide to any person a very large market that is one-sixth of world population," he said.

Jaitley is currently in Japan for a six-day investor wooing tour. He added that with the GST bill, taxation levels will be reduced because it will evade tax-on-tax, bring prices down and enabling businesses far more."

Jaitley also said that he was "quite confident" about GST getting support from two-third members of the Rajya Sabha "because almost every regional party supports it because regional parties also come from areas which are consuming states and all consuming states benefit from the GST."

While he didn’t take names, he said that that the party which was in power earlier had moved the GST bill now wants to bring some changes to the legislation, like GST rates to be capped at 18%, the proposed 1% additional levy on inter-state trade be removed, and an independent dispute resolution mechanism for states be set up.

Hinting at the removal of the additional levy of 1%, he said, "one particular change I am willing to accept. (In) others there is some difficulty."

Image source