GOVERNMENT BILLS

1. The Central Goods and Services Tax Bill, 2017-

2. The Integrated Goods and Services Tax Bill, 2017-

3. The Goods and Services Tax (Compensation to States) Bill, 2017-

4. The Union Territory Goods and Services Tax Bill, 2017-

SHRI SURENDRA SINGH NAGAR: In my view this Bill is a very well thought out Bill. I would like to know that what would be the impact of this Bill on our GDP. The inflation would also fluctuate with the implementation of this Bill. My another concern is regarding the effect of GST on FDI after its implementation. GST is based on the concept of “one country, one tax”. But after its implementation if a person intends to do business in all the states, he would have to register himself in all those states. The Government should simplify this process. I would also like to know that if some compensation is demanded by a state, in case of drought or flood, then what policy would be adopted by the Government? A huge data would be generated after the implementation of GST. But no provision has been made in this Bill so far as the privacy of that data is concerned. Till today, it is not known that what would be the rates of tax under GST? It has not been cleared that how the Government is going to educate the people with regard to its implementation. 70 percent of small traders are not having computers. In such a situation how would they be able to file their returns? Steps should be taken by the Government in this regard. I would suggest that input-credit shouldn’t be linked with the payment. I would also suggest that only single tax should be levied on the agriculture produce instead of multiple taxes. The inflation would certainly rise with the levy of taxes on services and the common men would also be affected by it. Though provisions with regard to put a check on profiteering has been made by the Government but it has not be told that how the profit would be passed to the consumer in case of prices of goods are slashed? I would also suggest that steps should be taken by the Government to ensure that this new law is not misused by the officials. With these words, I support the Bill.

SHRI SATISH CHANDRA MISRA: My party has always been supported the GST. I would like to draw the attention of the hon. Finance Minister towards the problems that would come across to small businessmen after the implementation of GST. They are not having internet facilities and they would have to pay more to chartered accountants. Under Clause 69 of the Bill, the power to arrest has been given to the Commissioner. He can arrest if an offence has been committed under Section 132 (a) onwards. Several provisions of Section 132 read with Section 138(1) are contradictory as some offences are non-bailable under Section 132 and simultaneously, the very same offences under Clause 138 (1) are compoundable. Power of seizure is there under Section 130. Now, the material, not only can it be seized but under Section 129, it can be detained as well, and it will be released only after paying a minimum twenty-five thousand rupees or paying hundred per cent of the fine. In my view, at least, in the first year, there should be a relaxation as there can be some difficulties in the very first year in understanding the law. We only have the apprehensions regarding the multiplicity of the accounting system. Now maintaining two accounts may result into some flaw and then landing into penalty. Therefore, for these penal provisions, for the first year, at least, there should be some relaxation. With these words, I support the Bill.

SHRI SHARAD YADAV: Several hardships have been emerged before the MSMEs due to GST. About 35 types of documents would have to be submitted by these enterprises. I would urge upon the hon. Finance Minister to look into the matter and also to take steps to simplify the GST. I would like to congratulate the hon. Finance Minister for making consensus in the country on GST. The network regarding GST has been given to a single company. In this regard I would like to suggest that this type of responsibility should be given to our Nationalized Banks. There is an apprehension amongst the small businessmen that inspectors and officials would get the free hand as a result of the stringent penal provisions of the Bill. The Government should disclose the steps it would take to curb it? In my view consensus on several other things should also be made. The Biscuit industry is also going to face certain problems due to GST. It should also be taken care of by the Government. With these words, I fully support the Bill.

SHRI PRAFUL PATEL: While supporting the bills, I would like to mention some points. Whether it is FERA or FEMA or PMLA, I think, in any economic matter, it goes into arrest and seizure, hence we need to correct this impression. Because, the harsh penal provisions, destroy the economic climate of the country and as a consequence of which comes the slowdown. We need to build unanimity that every economic offence should not be ending up in jail. This GST is going to lead to a lot of initial issues because of interpretation. The adjudicating authority do come up with various interpretations and getting relief would be much difficult. There are so many slabs and the slabs will come into interpretation. I think, the GST Council also needs to be apprised of these issues. The Council must ensure that the local bodies and others, and even the States, are compensated in a very judicious and a timely manner. The products like petroleum, electricity, tobacco and alcohol have been kept out of the purview of the GST. The Government talks of ‘one-nation-one­grid’ regarding electricity and today, the States are selling electricity to each other. I think, it is a major item which needs to be resolved in the due course. Petroleum should also needs to be rationalized as even in States like Maharashtra petroleum products are taxed highest. So, if we want to have ‘one-nation-one-tax’ and an equitable growth in the country, I think, these issues have to be dealt with adequately by the GST Council. There is no doubt that GST is good for the country, but there will be initial difficulties.

SHRI SITARAM YECHURY: The fundamental problem with the GST is that it concerns the federal structure of our Constitution. The Government refused to heed our request and brought this as a Money Bill. Any regime that restricts the federal structure of our Constitution is of concern to this House. I have very serious concern about the whole concept of ‘one nation, one tax’ and ‘one nation, one grid’. So, if the GST Council takes a decision, that is affecting the powers of the States or the rights of the States according to our Constitution, it has to come for Parliamentary approval. I think it is a very serious lacuna in this Bill, which has to be corrected. The C&AG must be the competent auditor for this GST Council and all the things connected with it. The States have no independent power for indirect taxes except for alcohol and petrol. A higher level of indirect tax means greater burden on the consumer. If you want to contain this thing, the proper consideration of the tax structure is extremely important. We should have a four-tier rate structure instead of a two-tier rate structure. The Government must ensure that luxury goods do not get tax exemptions, otherwise the prices of essential goods will rise and that would be a greater burden on the common people. I would like the Minister to consider a 12% State GST rate and an 8% Central GST rate. All tax concessions are going to be removed, then, how will you promote or protect the handlooms, the khadi products, the coir products and the traditional crops? The budgetary support can’t solve this problem. Any turnover beyond Rs.20 lakh is part of a state’s tax net now, at least that limit will have to be raised in order to allow concessions for such traditional producers. The GST will take away the right of the State Government to collect the tax directly for a turnover of 1.5 crores of rupees or below.

SHRT D. RAJA: The collection of taxes is the primary exercise by any Government to mobilise resources and to generate revenue for nation-building and for building of economy. We should keep in mind that India is a country where we have tremendous unequal economic development and unequal regional development. How are we going to create a pan-Indian economic zone, a single market, in such a situation? How is the Government going to ensure fiscal federalism? In the GST Council, the Centre has more weightage which can adversely impact the financial powers of the State Governments. The GST regime can adversely affect the financial autonomy of the States. The trade unions are demanding that construction workers’ welfare cess and Beedi workers’ welfare cess must be protected and given exemptions. There must be protection for MSME products, agro-based products, farmers and their products. The corporates can take more advantage of GST. Why the Government is involving IDBI and other private sector banks? Some private agencies will have our data and they will not be in the public domain. The CAG cannot have access to them. This is a very serious issue. This is a serious legislation, which has got far-reaching implications on the future. When we move towards a common tax system, it would be difficult to address certain complex issues. The state like Tamil Nadu has got a number of welfare schemes. How can it be allowed to continue with those welfare schemes, if we move towards this Common Tax System? The Centre should take all the State Governments and the Parliament into confidence.

SHRT NARAYAN LAL PANCHARTYA: This is essential for any democratic country to get their people rid of burden of taxes, control inflation and ensure inflow of adequate money into exchequer for people welfare development works. In this direction the GST is certainly a progressive move. The earlier Government had no clear cut policy about the GST. This Government has passed this Bill in Lok Sabha. The imperial taxation system is still continued in the country, but now it will not continue any more. By the implementation

of the GST corruption will be curbed, black money will controlled, tax collection will be transparent, work will be done in a time frame and exchequer will be enriched. Under the GST everything will be online. By this a uniformed national market will be available through out the country, local bodies will be empowered and the exchequer states, who are financial backward, will be enriched. By the system the operational costs will go down, saving will go up, export of the country will touch height and inflation will go down. Farmers have been kept out of the ambit of GST.

SHRI V. VIJAYASAI REDDY: The GST has multiple tax system. There is only one difficulty in having the multiple tax rates is with regard to the classification of goods. While classifying the goods, there will be an intense lobbying from various industries to accommodate them at the lower tax structure. I would like to bring to the notice the cascading effect of the GST also. When we worked out, the degree of the cascading of taxes in respect of various sectors, we found it very high. There would be some manufacturers, some traders who have got the intention of jacking up their profits by making more money. They may charge this full GST even though they avail the input tax credit. Anti-Profiteering Committee is constituted to ensure that the benefits are being passed on to the end user. The guidelines for this Committee should be carefully drafted, carefully framed and the powers that are vested with the Committee should not be misused and the Committee should perform its duties for which it is constituted.

SUBHASH CHANDRA, making his maiden speech, said: Since 1950, till today the growth of our country is negative. A poor of this country is becoming poorer and the rich is getting richer. I think 10 per cent people of the country are becoming more and more rich because of the laws of this country. The disproportionate growth needs to be reformed in the coming time and GST is the right step taken in this direction. If we had paid a heed to the views by a former Prime Minister of the country in 1985, I think the country would not be the same as it is today and the poor would not become poorer. He has further stated that we could not do much because of the drawbacks

of the Government and the party. There were some weaknesses in the working system in all important enterprises of India because some elements got the protection of corruption. In 1971, another former Prime Minister of the country stated that the politics should be such which could help the poor and should run on the thinking and programmes of the mass. For this we have to break the connivance between political parties and selfish elements and we have to change electoral rules. Today, the situation remains same as was earlier. Many things need to be done so that tax payer in the country should not face any problem. Ultimately, direct taxes or indirect taxes are imposed on the public or on the consumers. We should reduce the tax structure so that the Government need not make such kind of penal provisions under which people get arrested. In this country indirect taxes are too much because there is no ease of doing business, which is a reason of corruption. The structure cannot be improved further without setting it right. We should raise such a structure which is unique in the whole world and this would increase revenue also.

SHRI KAPIL SIBAL: We have cooperated with this Government because we want a GST for the people of India. But I do believe that the kind of GST that we have given to the people of this country is not the kind of ideal GST that we wanted. This is not a GST where we were looking for one market and one rate. It is a four-tier GST tax structure of rates a 5, 12, 18 and 25 per cent. The tax rate both in the Central GST and the State GST can up to a maximum of 20 per cent but having about a 55 per cent tax rate in respect of a particular commodity or service is, in fact, like making mockery of this legislation. The provisions incorporated in this GST might actually result in people ceasing doing business. Proper legislation should be in place to ensure security of data as its access to competitors may create havoc. 40 per cent of the GDP in terms of value has been excluded from the GST system. Some of the provisions incorporated in this GST are anti-consumer, anti-farmer, anti-agriculture and anti-industry. Small and medium sector is going to face more difficulties due to such GST. Inspector Raj is back. I demand for exemption to any ancillary activity regarding agriculture.

Hence, make the GST simple, definition should be clear to enable people understand it, the consumer should be protected and the industry should be given a low rate of tax to enable it in competing with international community.

SHRI RAMKUMAR VERMA: I congratulate this Government for this historic bill. Now Centre and states both will progress. This will give boost to entrepreneurship. Tax regime will become simple. Everyone has supported this bill. Our GDP growth rate will increase and inflation will go down. This will curb corruption also. Traders were used to evade the taxes. Now there will be no tax evasion. Government will get more revenue for welfare schemes. This will prove very helpful for poor people and our country. This Bill will create an atmosphere of healthy competition. Our Government is committed for transparent system and economic discipline. This bill will prove beneficial for all and especially for poor people, farmers and dalits. Our Government is committed for the welfare of humanity. So our country will move on the path of progress.

SHRI NARESH GUJRAL: I support these path-breaking bills which have the potential to change the entire Indian economy. GST reflects the true spirit of cooperative federalism in this country. This bill can be considered as anti-black money law too. This bill is going to benefit both the producing states and the consuming states. Trucks and commercial vehicles have to spend so much time at state barriers. Now with the free flow of traffic their fuel would be saved and the pollution will also get reduced. Our generation next has intellectual ability to build businesses. But our inefficient and corrupt tax-regime was a dampener for them. Now these bills will bring simplicity and transparency in our indirect-taxation. FDI was waiting for this revolutionary bill.

SHRI SUKHENDU SEKHAR ROY: My party has been maintaining consistently a stand that we are in favour of the GST. But after going through these bills we have certain reservations because there are certain in-built contradictions. Now the Commissioner will have the power of audit and even the special audit.

What about the CAG then, which is a constitutional body. So I have got a little confusion there. I know that the Finance Minister being an eminent and successful lawyer would reply to each and every issue.

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