The Lok Sabha Thursday passed four bills to amend the GST law, as Finance Minister Piyush Goyal said lower tax rates will improve compliance and enhance revenue collection.
Replying to a debate on Good and Services Tax (Amendment) Bill 2018, he said tax collection will not come down despite reduction in taxes as he allayed the concerns to that effect raised by some members.
The lower rates will rather improve compliance and enhance revenue collection, he added.
The four bills, which were passed together by a voice vote, are the Central GST (Amendment) Bill, Integrated GST (Amendment) Bill, GST (Compensation to States) Amendment Bill and Union Territory GST (Amendment) Bill.
Goyal said in the last one year, GST on about 400 goods and 68 services were reduced. GST came into force from July 1, 2017.
“We are empowering 125 crore people of India through Good and Simple Tax,” he said, referring to the GST. Promotion of an honest tax structure will improve compliance as it will encourage people to come forward and pay taxes, he said.
On the problems faced by the textile sector, he said the GST Council has resolved most of the problems of the sector. With the introduction of GST, textile has become cheaper, he added.
While moving the bill for consideration, Goyal said the capacity to slash the GST rates on more items would go up as GST revenues and the compliance rate increases and the economy formalises.
He also pointed out that the government was able to collect GST in line with the country’s fiscal deficit target.
Participating in the debate, senior Congress leader Mallikarjun Kharge said that the BJP-led government does not know how to implement GST.
“More than 50,000 MSME industries have closed down in Tamil Nadu alone due to faulty implementation of GST,” he stated. Saugata Ray (TMC) said the recent cut in GST rates on 100 items was a “pre-poll” sop and the estimated loss to the exchequer on account of this would be Rs 12,000 crore.
“The Finance Minister has to explain from where the money will come,” Ray said, while observing that Goyal was not present in the House.
The BJP members then informed Ray that Goyal has gone to Rajya Sabha for voting on a bill, to which Ray remarked “This is why I say, Finance Minister should be from the Lok Sabha”.
Referring to Goyal, Ray said “the caretaker Finance Minister” has brought four amendment bills.
“Today Arun Jaitley came to vote in the Rajya Sabha. I am wondering when the change in portfolio will happen,” he said.
Kalikesh Singh Deo (BJD), while supporting the bills, asked the government to make it easy to pay taxes under the GST. He said the MSMEs were being stifled with high compliance burden under GST.
“The government is doing too little and taking too much time to do it,” he said.
Anandrao Adsul (Shiv Sena) said Goyal in the later part of his speech went on a “political tangent and then the discussion revolved around politics. I couldn’t understand if the discussion was on GST or was it poll campaign.”
However, he said that despite the fact that India’s economy was growing at a faster rate, why was the value of rupee declining and the price of fuel increasing.
Jayadev Galla (TDP) reiterated the demand to fulfil the commitments made by the Centre for Andhra Pradesh.
He said that the government talks about special category states in the GST law but do not want to extend the status to Andhra Pradesh.
“People of the state are not fools or illiterates. They will be giving befitting reply in the election. I demand extension of all benefits to Andhra Pradesh….How can we support this bill,” he said, while demanding that the period of compensation should be raised from 5 to 10 years.
He also asked the Centre to remove GST on red chilly and turmeric powder.
K V Reddy (TRS) said the law has not been able to cut tax evasion and reduce fraud and “now there is more ambiguity”.
He asked the centre not to bring petrol and alcohol within the purview of the GST.
Rajesh Ranjan (RJD), Ravindra Kumar (BJP), Renuka Butta (YSRCP), P S Chandumajra (SAD) also participated in the discussion.