With an aim to roll out Goods and Services Tax (GST) bill, country's most ambitious indirect tax reform since independence, from April 1, 2017, Prime Minister Narendra Modi has reviewed the progress on implementation of action plan.
Finance Minister Arun Jaitley along with his team including Finance Secretary Ashok Lavasa and Revenue Secretary Hasmukh Adhia made a presentation on the state of readiness for creation of GST bill. Prime Minister reportedly wanted to understand the main areas where he should focus his mind on. Also, he wanted an update on the revenue neutral rate, IT backbone being developed and concerns of the states. The government wants to implement the new regime from April 1 so as to ensure a smooth rollover to the changed tax structure from the beginning of the new fiscal and avoid mid-year alterations.
The presentation detailed the steps to follow including the timetable to get the supporting legislations approved. This presentation came within days of the Union Cabinet approving setting up of all powerful GST Council. PM was informed about the widespread demand for keeping GST rate at 18-19 per cent, expectations of states from the new regime and the impact of different tax slabs on the Centre in terms of compensation it has to pay states for loss of revenue.
GST, which was first proposed a decade back, is seen as potentially transformative for India’s economy, adding as much as 2 percentage points to the GDP while also improving the ease of doing business and encourage investment in manufacturing. It is also expected to result in greater tax compliance, boosting government revenues.