THE CONSTITUTION (ONE HUNDRED AND TWENTY-SECOND AMENDMENT) BILL, 2014
THE MINISTER OF FINANCE, MINISTER OF CORPORATE AFFAIRS AND MINISTER OF INFORMATION AND BROADCASTING (SHRI ARUN JAITLEY) moving the motion for consideration of the Bill said: In the matter of revenue and taxation, probably this is the most important Amendment that has ever been taken up in the Constitution itself. Our current structure of indirect taxation empowers both the Central and the State Governments to levy different kinds of taxes. The object of this Constitution Amendment is to bring about a certain amount of convergence between these taxes so that the taxation mechanism becomes extremely simple. As far as the advantages of the GST structure is concerned, the difficulty being faced by the present set up is that there is no uniformity of tax rates and structures across the States. Therefore, different taxation in different States prevents seamless transfers of goods and services as far as the country is concerned. The second problem which has been noted with regard to the present structure is that is different levies of taxation are made, we have the concept of tax being levied on tax itself. Now the advantages that the GST Constitutional Amendment will bring about will be that it will simplify and harmonise indirect tax regime as far as the whole country is concerned. It is expected to reduce the cost of production and inflation in the economy thereby making Indian trade and industry more competitive domestically as well as internationally. It is also expected that the introduction of GST will foster a common or a seamless Indian market and contribute significantly to the growth of the economy. GST will broaden the tax base and result in a better tax compliance due to a robust IT infrastructure. Due to this seamless transfer of input credit from one stage to another in the chain of value addition, there is an inbuilt mechanism in the design of the GST that it would incentivise tax compliance. Therefore, evasion itself would become difficult.
The discussion was not concluded.
Source- Synopsis of Debate in Lok Sabha held on 24.04.2015
