The Goods and Services Tax (GST) will lower the price of commodities once implemented, finance minister Arun Jaitley said on Thursday, a day after the Rajya Sabha passed a bill that paved the way for India to emerge as a common national market.
Speaking to reporters in Delhi, Jaitley said once rolled out, the GST will improve the ease of doing business in the world’s fastest-growing major economy as a confusing and overlapping array of state levies are replaced by a nationwide tax.
“Yesterday was a major step forward in having a uniform tax in the country… The GST will help a large body of traders and business people,” he said.
“The tax rate will go down which will lead to lesser prices of commodities.”
His comments came a day after the Upper House passed the 122nd Constitution amendment bill though major disputes over the rate of tax remained to be ironed out.
“The important thing is that the GST bill was passed unanimously, except for the AIADMK who walked out,” said Jaitley. “The constitutional amendment was pending for a long time, predominantly because RS was unable to reach a consensus.”
The government is in a minority in the Upper House and managed to push through the bill after protracted and uneasy negotiations with the Congress.
“We have been accommodative in our dialogue with various political parties but without compromising on fundamentals,” Jaitley said.
But the GST’s actual implementation is still some distance away though the government expects to roll out the new system from April 1, 2017. The Congress is batting for a cap on the GST at 18%, but Jaitley has maintained the government will try to keep the rate “moderate” without specifying the actual figure.