At midnight, ushering into Saturday, the press of a button in the Central Hall of Parliament announced the arrival of the Goods and Services Tax in India. Accompanied by Prime Minister Narendra Modi and his Cabinet, President Pranab Mukherjee rolled out GST, India’s biggest-ever tax reform, which will bring in place a single tax system that some analysts predict will be bigger than that of the European Union.
Finance Minister Arun Jaitley kicked off the proceedings, delivering a short address in which he called GST an “important achievement for the entire country.” “The old India was economically fragmented, the new India will create one tax, one market and for one nation,” Jaitley said.
Jaitley was followed by,Prime Minister Narendra Modi, who spoke at length said ,“With GST, the dream of ‘One India, Great India’ will come true. We are setting India’s roadmap with GST. The best brains of the country worked together for GST.”
Before going on to list a number of problems that GST would solve, including black money, corruption and tax evasion, Modi drew a parallel between the national tax and the Bhagwad Gita. “It is a co-incidence that Gita has 18 chapters and today was the 18th meeting of GST Council,” Modi said.
The single GST – or Goods and Services Tax – is expected to change the cost of most products in India and Make it easier to do business. It will replace a complicated mix of 500 types of state and federal tax, Modi said.
“GST is a simple, transparent system which prevents generation of blackmoney and curbs corruption. The system gives opportunity to honesty and people who do honest business.”
Addressing the gathering, President Pranab Mukherjee said the introduction of GST is a moment of precedent for the country and a matter of personal satisfaction for him because of his role as Finance Minister earlier. “I had always believed that GST was a matter of time and was happy when it was enacted and I gave assent to the Constitution amendment last year,” he said.
Having failed to coax Opposition into not “playing politics” over GST, the Centre went ahead with its glittery Parliament ceremony to launch GST. This was only the third time in recent history that a joint sitting of Parliament was called at midnight.
Before the launch, Modi’s midnight GST launch was compared with the most famous midnight Parliament sessions of all – that of Prime Minister Jawaharlal Nehru on August 14, 1947 when he made his ‘tryst with destiny’ speech to announce India’s independence.
Observers have described the reform as the most meaningful change to India’s tax regime since the country became independent in 1947.
Before the big launch of the Goods and Service Tax (GST) at the Parliament’s central hall, Prime Minister Narendra Modi in his speech coined GST as ‘Good and Simple Tax.’
PM Modi called the new tax reform as India’s biggest move since Independence.He also recalled Nehru’s tryst with destiny speech, calling the venue the perfect launchpad for GST.
Noting that he had carried demonetisation “on his shoulders”, PM Narendra Modi asked the government’s senior most bureaucrats at a recent interaction to do all they can to make the goods and services tax (GST) a success by minutely examining its impact on their departments.
The reference to his singular role in making demonetisation a success in terms of ensuring the government did not face a popular backlash could have reflected a touch of conceit had it not been for the near unanimity in BJP and among senior ministers that “notebandi” rode on Modi’s credibility.
With around 20 months to go before the next Lok Sabha polls, Modi has taken on his biggest political challenge that is likely to occupy the government’s attention for much of this year. GST’s success can strongly embellish his image as a decisive leader and able implementer while unmet expectations can extract a steep cost.
Unlike demonetisation, which was shrouded in secrecy, GST has been subject to protracted and tortuous negotiations in full public gaze. Its scope is larger and more lasting and is seen as part of measures that include, but do not stop, at demonetisation.
GST is expected to check tax evasion and broaden tax base. In the new regime, all filings will be done only through electronic mode to ensure non-intrusive administration. This will minimise taxpayers’ physical interaction with the tax officials.
The GST regime seeks to reduce rates of over 50 per cent of items of daily use and charge others at much lower rate of 5 per cent, 12 per cent and 18 per cent.
The reform has been clothed in the promise that higher compliance and digitisation will deliver low inflation, bigger welfare budgets and moderate tax rates.
The midnight launch of the Goods and Services Tax regime was a selfie moment for many MPs who wanted to capture the historic moment.
Hema Malini and many other MPs were seen taking photos from their mobile phones in the Central Hall of Parliament, where the GST launch ceremony was organised.
Even minister of state for civil aviation Jayant SInha was seen taking pictures when Prime Minister Narendra Modi was giving his speech.
Software providers such as SAP have undertaken initiatives to reach out to the scores of small-and-medium enterprises to familiarize them with the technical aspects of the GST rollout. SAP is also providing software to help companies become tax compliant and better manage their businesses.
SAP India’s president and managing director, Deb Deep Sengupta, told CNBC in a phone interview that “technology will be least of the problems” in the GST rollout and implementation.
“I think it’s a matter of creating the awareness on a continuous basis, working both with the policy makers as well as with the industry associations and the end consumers is something which is going to be, I would say, the biggest challenge and the opportunity,” Sengupta said.
Acknowledging that the criticism that GST would put India into disarray wasn’t entirely misplaced, the government admitted that there would be teething problems. Speaking at India Today’s Tryst With Tax Conclave on Friday, Finance Minister Arun Jaitley and Information and Broadcasting Minister Venkaiah Naidu both accepted there are glitches with GST, but asserted that the issues will be fixed.
Union Finance Minister Arun Jaitley with MoS for Finance Santosh Gangwar, J & K Finance Minister Haseeb Drabu, Revenue Secretary Hasmukh Adhia and CBEC Chairperson Vanaja N Sarna addressing a press conference on the concluding day of the 14th Goods and Services Tax (GST) Council meet in Srinagar on Friday. courtesy: Indian Express
GST was made a reality by the crack team comprising of these dedicated people:-
Arun Jaitley, finance minister piloted the GST legislations, including amendment to Constitution, in the last three years and as first chairman of the GST Council, comprising the union and state finance ministers. He insisted on consensus on all decisions, even if it meant postponing it till the next meeting.
Hasmukh Adhia, revenue secretary is the man who drove GST, often pushing even the states to decide. Now knows GST like the back of his hand. The IAS officer from Gujarat has been dealing with all govt agencies and trade and industry, addressing their concerns and being strict, wherever needed.
Vanaja S Sarna, CBEC chairperson Since April, she has been heading the agency at the Centre which is responsible for the implementation and successful rollout of the new tax regime.
Arun Goyal, additional secretary of GST Council, UT cadre IAS officer was roped in from Project Monitoring Group handling held-up projects to get the new tax regime moving. Seen to be thorough with laws and rules.
Upendra Gupta, Commissioner (GST), CBEC is the man everyone turns to on technical matters. Gupta, a revenue service officer, is the nuts and bolts man on the issue.
Udai Singh Kumawat, joint secretary (Revenue Department) worked behind the scene with his team on the legislation and the rules.
Naveen Kumar, GSTN chairman,The former Bihar chief secretary has a sound knowledge of finance, having worked on revenue issues in the state. While he has worked on the development of the technology platform, he has brought to the table crucial issues related to taxation.
Prakash Kumar, CEO, GST Network An IIT alumnus, he joined the IAS before quitting to work with technology companies such as Microsoft. Understands technology and has been racing against time to keep all forms and spreadsheets ready.
Alok Shukla & Amitabh Kumar, joint secretaries (Tax Research Unit, CBEC)
The two men who together work on rates and critical policies on indirect taxes. They were instrumental in working out product-and service-specific rates and slabs.
Shaktikanta Das,former revenue and economic affairs secretary was instrumental in pushing GST soon after the Modi government took charge. As revenue secretary, he worked closely with Jaitley and the empowered committee of state finance ministers to break the deadlock and draw up the draft legislation.
Najib Shah, former CBEC chairman was at the helm when GST was on the drawing board. Shah oversaw most of the work on the current design and implementation until his retirement in March.