Prime Minister Narendra Modi on Saturday said the Goods and Services Tax (GST) is not the legacy of one political party, but the collective legacy of all political parties, adding that the GST will ensure economic integration and will bring all the states closer.
Addressing the Central Hall of Parliament ahead of the midnight GST rollout, Prime Minister Modi said the scope of the GST is unlimited to financial system, now India will move in a new direction.
"It is not a success of any party or any government. It is the result of everyone's effort. The scope of the GST is unlimited to financial system. Now, India will move in a new direction. With the launch of the GST, we are ensuring the progress of the country. The launch of the GST is not the achievement of a particular party or a particular government; it's a collective achievement," Prime Minister Modi said.
Asserting that the GST is an example of strength of 'Team India', Prime Minister Modi said it is setting India's roadmap as it is becoming a reality tonight.
"I welcome you all to this launch ceremony. I express my gratitude. "Central Hall was always the most sacred place to launch the GST. The GST is a system that will allow states and the centre to work together towards a new India. And GST will be an important aspect of a new India," he added.
Congratulating the GST council and all those who took the tax reform forward, Prime Minister Modi said whoever forms the future governments, they will abide by the pro-poor principal of the GST.
"On November 1949, it was this place, where the Constitution was adopted. And now, we have gathered again at this sacred place for GST rollout. There could not have been a more sacred place," he said.
The Prime Minister said just as Sardar Vallabh Bhai Patel unified India by helping several princely states subsume into a common entity, the GST will bring economic unification.
Recalling theoretical physicist Albert Einstein, the Prime Minister said the most difficult thing to understand is the income tax and if Einstein was here, he would ask what is happening.
"The number of taxes have caused confusion in this country. Now we are free of that. The GST is beyond economics. The country is moving forward due to a modern taxation system under the GST," he added.
Prime Minister Modi said that it is coincidental that the Bhagavad Gita has 18 chapters and the GST council also had 18 meetings before the implementation.
Hailing the GST, Prime Minister Modi said it would stop Black Money and corruption and it would also benefit the poor of the nation.
Meanwhile, the most anticipated tax reform for the Indian economy rolled out from midnight June 30 from the historic Central Hall of Parliament.
The biggest tax reform since independence - GST - will pave the way for realisation of the goal of One Nation - One Tax - One Market.
Ahead of the launch, the Parliament was in all its glory on Friday evening with its main building decked with rows of bright bulbs and people taking to streets to celebrate. It is only the fourth time in the history of Independent India that a midnight function is being organised in the Central Hall of Parliament.
The GST is expected to benefit all the stakeholders namely industry, government and consumer as it will lower the cost of goods and services give a boost to the economy and make the products and services globally competitive, giving a major boost to 'Make in India' initiative.
Under the GST regime, exports will be zero-rated in entirety unlike the present system where refund of some of the taxes does not take place due to fragmented nature of indirect taxes between the Centre and the States.
However, the GST will make India a common market with common tax rates and procedures and remove economic barriers. GST is largely technology driven and will reduce the human interface to a great extent. GST is expected to improve ease of doing business in India.
In majority of supplies of goods, the tax incidence approved by the GST Council is much lower than the present combined indirect tax rates levied [on account of central excise duty rates / embedded central excise duty rates / service tax post-clearance embedding, VAT rates or weighted average VAT rates, cascading of VAT over excise duty and tax incidence on account of CST, Octroi, Entry Tax, etc.] by the Centre and State(s).
On March 29 this year, the Finance Minister of India tabled four GST Bills for consideration and passage in the Lok Sabha namely The Central Goods and Services Tax (CGST) Bill, 2017, The Integrated Goods and Services Tax (IGST) Bill, 2017, The Union Territories Goods and Services Tax (UTGST) Bill, 2017 and the GST (Compensation to States) Bill, 2017.
They were passed by the Lok Sabha on March29, 2017 and by the Rajya Sabha on 6 April, 2017.
The GST Council has decided the final structure of GST as follows:
• The threshold limit for exemption from levy of GST is Rs. 20 lakh for the States except for the Special Category, where it is Rs 10 Lakh.
• A four slab tax rate structure of 5 percent, 12 percent, 18 percent and 28 percent has been adopted for GST.
• A cess would be levied on certain goods such as luxury cars, aerated drinks, and pan masala and tobacco products, over and above the GST rate of 28 percent for payment of compensation to the states.
• The threshold for availing the Composition scheme is Rs. 75 lakhexcept for special category States where it is Rs. 50 lakh and they are required to file quarterly returns only. Certain categories of manufacturers, service providers (except restaurants) are out of the Composition Scheme.
Other important Features of GST are:-
· GST envisages all transactions and processes to be done only through electronic mode, to achieve non-intrusive administration. This will minimise tax payer's physical interaction with the tax officials.
· GST provides for the facility of auto-populated monthly returns and annual return.
· It also facilitates the taxpayers by prescribing grant of refund within 60 days, and provisional release of 90 percent refund to exporters within 7 days.
Further facilitation measures include interest payment if refund is not sanctioned in time, and refund to be directly credited to bank accounts.
· Comprehensive transitional provisions for ensuring smooth transition of existing taxpayers to GST regime, credit for available stocks, etc.
· Other provisions include system of GST Compliance Rating, etc.
· Anti-profiteering provisions for protection of consumer rights.