MP Rajeev Chandrasekhar spoke in the Rajya Sabha on the constitutional amendment bill that enables GST. MP Rajeev Chandrasekhar, who was the Member of Select Parliamentary Panel on GST, said “It is to that objective of growing our economy that reforms become important and GST is independent India’s most significant Indirect Taxation reform. Indirect Taxes impact every Indian rich or poor and every business – big or small. Indirect taxes form the backbone of our economic model given the low direct taxes coverage. And so reforming and simplifying and over time reducing the Indirect taxes effects almost every Indian.
According to the country’s income tax data, published for the first time in 16 years, in 2013 only 1.25 crore paid income tax that is just one percent of India’s population. India’s direct to indirect tax ratio stands very low at roughly 35:65, the MP said.
Key points made by Mr. Chandrasekhar’s are:
· GST reform would expand GDP by 1-2%. Apart from creating transparency and ease to consumers is also a big catalyst for small businesses because it creates a large open market for them, with none of the traditional barriers of costs and compliance of inter-state trading of goods.
· The intimidating tasks of complying with and paying 14-16 different taxes, which are now reduced to just 2 – a state GST and a Central GST. With the elimination of the Central Sales Tax and Entry Taxes, producers can truly access the promise of the large Indian market -shipping to the farthest parts of the country away with no additional compliance costs or barriers
· GST will create one large Indian market – realizing the vision of one India. There is ample evidence that large common markets and Freeing up trade create economic growth, more jobs, wider choice of products and services, lower prices, less corruption and red tape.
Label of Imperfect Bill is unwarranted
Speaking at the Rajya Sabha , Chandrasekhar said “I am a bit mystified by some voices critiquing this bill as being imperfect. Ironical and without basis for two broad reasons – Firstly, it may be less than perfect but that is because it has its origins as a legislation built through consensus with state government amidst the fear of loss of taxation power and revenues. Every tax reform and indeed economic reform has been an evolution of an idea or law. There will be a process of evolution and improvement as GST lays its roots and expands its coverage Almost all taxation reforms and indeed economic reforms have evolved from its original legislation and intent. GST too will evolve from its current form.
Secondly this recently discovered virtue of perfection is ironical, because I can point out in painful, embarrassing detail about real imperfections over the last decade in legislation and policies that Parliament and Govts have passed. But I will resist the temptation to do so, to preserve the spirit of bipartisanship we have in the house today. And so a less than perfect GST is better than no GST. “
Delay in passing GST has cost the nation $20 Billion Dollars :
He further added, “It has been a long road for GST. I also had the opportunity to serve as a member of the Parliament’s Select Committee on GST and be a part of wide ranging public consultation process with various stakeholders. So it was frustrating to watch that work being tossed around the last three sessions, even by conservative estimates an excess of 20 billion dollars considering its potential 1-2% boost to the GDP.
Concluding his speech he said “This year, 2016 marks 25 years of economic liberalization, which was a milestone in India’s economic history. The incomplete process of unshackling our economy and consumers can be completed only with taxation reform, which is a big part of our next generation of reforms that will benefit economy, citizens and business. Where does our future lie? In higher direct taxation and moderating Indirect taxation or the other way around. There is much work to be done in reforming tax administration and use of technology to make simpler, easier and friendlier. Today we stand ready to take the first step in these reforms and changes by undertaking the biggest indirect tax reforms since India’s independent history.”
