Hopeful of resolving issues to roll out GST from Apr 1: FM
Finance Minister Arun Jaitley today reiterated that the Centre is still aiming to roll out the Goods and Services Tax (GST) regime from April 1 if all pending issues are sorted out.
GST, which is to subsume most of central and state taxes like excise, service tax and VAT, needs to roll out by latest September 16, 2017, he said.
This because, under the Constitutional Amendment passed by Parliament for the GST implementation, some of the existing levies would expire after September 16.
Jaitley said the government was aiming to implement the new sales tax from April this year. "We would want it to be implemented from April if all issues are resolved."
"There is a provision for GST implementation because constitutional amendment has been passed. So it's Constitutional necessity that before September 16 it should be rolled out," he said on the sidelines of the Vibrant Gujarat Global Summit here.
GST, or a national sales tax, will replace a jumble of levies to create one of the world's biggest single market. A single tax will make it easier to do business in the world's seventh-largest economy as also help combat evasion, boost revenue for the government.
But the rollout is struck because of differences between the Centre and states over control and administration of the tax as also on how the states that face revenue shortfall because of the GST rollout would need to be compensated.
Jaitley is hoping to resolve the issue of dual control of tax payers at the next meeting of the GST Council on January 16.
"We would want it to be implemented from April if all issues are resolved. But implementing before September 16 is a necessity," he said.
The Finance Minister said the digitisation that got a leg up post demonetisation of old 500 and 1,000 rupee notes, together with GST will lead to expansion of formal economy and boost growth.
"The two steps together will lead to a larger economy and a cleaner GDP. I am hopeful that we will see the two this year," he said.
"GST Council is deliberative democracy in action. Most of the issues have been sorted. Some critical issues remain and I hope... they will be sorted out," Jaitley said.
He was speaking here at the conference on 'GST: The Game Changer for Indian Economy' organised as a part of the ongoing Vibrant Gujarat Global Summit 2017.
"When GST merges all the taxes and makes India into one entity, it's an advantage to the assessee as there will be no cascading effect of tax and will lead to larger revenues for states," he added.
The next meeting of GST Council is scheduled on January 16, to discuss the critical issues of dual control and cross empowerment which deal with the assessee jurisdiction.
India largely a non tax-compliant society: Jaitley
Union Finance Minister Arun Jaitley on Wednesday said that India was substantially a non tax-compliant society and demonetisation can lead to more formal banking transactions, thus nudging the society towards more compliance.
"We are substantially in terms of taxation, a non-compliance society. The narrowness of our tax base is realised by the data. Formal transactions can lead to higher revenues, and make us more compliant," Jaitley said here at the Vibrant Gujarat Global Summit 2017.
"Excessive paper currency has its own vices. There is anonymity and no history to the cash. When it moves to the banking system it is going to be a major step towards integration of informal or shadow economy into a more formal economy," he added.
With more efficient tax system and more digitisation, the economy would be cleaner, he added.
Talking about the inconvenience caused to various sectors because of the cash crunch due to demonetisation, he said difficult decisions initially pass through difficult phases.
"It can have temporary transient pain attacks, but in medium and long term, the roadmap on which country is destined to move can change," he said.