At the stroke of midnight, when the world sleeps, India awakens, to social networks (because, obviously!) and the GST.
Well, economics, finance, taxes are not everybody’s cup of tea. But, this is definitely something you must know about.
Yes! India enters one of the biggest, most complex, although imperfect, but ambitious tax reforms (after demonetization). One of the most remarkable feat, India’ GST Bill was not a cake walk.
Initiated by the Atal Bihari Vajpayee led- BJP government, this bill was an evolution of the economic aspirations of a developing India. Yes, an evolution! Because, the pavement to this economic reform can be dated back to 1970s.
The Indirect Taxation Enquiry Committee suggested changes in the taxation structure. Since then, the tax reforms have seen ups and downs. Going through various finance ministers, the tax reform, in the form of GST finally comes to being on 1st of July, 2017.
Here are some notable points about GST’s journey:
- Services tax was introduced for the first time in 1994.
- The BJP regime of Atal Bihari Vajpayee was the first to introduce it. Unfortunately, the bill faced vehement resistance. And, not from the opposition, but traders and some BJP led states itself. If GST is implemented, “blood would flow on the streets”, said a leader of the BJP ruled Delhi.
- The earlier version was suggested at 12%, i.e. 7% for states and 5% for centre.
- Under Prime Minister Manmohan Singh, the bill was reintroduced in 2007. Finance Minister P. Chidambaram asserted that GST would be rolled out in April 2010.
- 115th Amendment to the Constitution for GST was proposed by Pranab Mukherjee in 2011, the Finance Minister then. However, yet again, BJP states of Gujarat (Narendra Modi, Then Chief Minister) and Madhya Pradesh opposed the bill along with Late Jayalalitha led Tamil Nadu. Meetings with BJP led opposition including Arun Jaitley, fared no fruits. The bill failed to be passed once again.
- Finally, in a U- turn of events, Arun Jaitley introduced the bill in 2014. The bill, (unlike the nature of earlier opposition), was given a nod by UPA opposition.
- The GST is rolling out on the 1st of July, 2017.
What is GST?
GST stands for Goods and Services tax. It can be simply considered a replacement of multiple number of taxes by one.
GST is divided into three types. The following figure may clear things for you.
That would be enough to get a basic idea of what India is going through. For more details, click here.
The Opposition too seems happy with the bill. Although, they are stuck on some features, Congress choosing to boycott the ceremony of GST launch. In all, the opposition stands divided here.
However, it is tragic how the bill was opposed by BJP earlier in the UPA phase.
“We have endured the pains of blind opposition and our hearts are heavy with the memory of lost years”
-P. Chidambaram on BJP’s earlier opposition to the bill!
Anyways, congratulations Parliament, good job! We never expect to see a consensus so good among the ruling and the opposition. Yes! Only if we could kick out the self-fare politics and talk about welfare politics!
By the way, Welcome to new reformed India.
Information: The Indian Express
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