NEW DELHI — The lower house of parliament passed a bill on Wednesday that seeks to transform India into a common market, bringing multiple state and central levies into a single national goods and services tax, which is expected to boost manufacturing and reduce corruption.
The upper house of parliament would now have to pass the constitution amendment bill, after which more than a half of India's 29 states must approve it before the central and state governments would get equal powers to tax goods and services.
"The whole country, which is one-sixth of world's population, would become a single market and therefore it would give a necessary fillip as far as the trade is concerned," Finance Minister Arun Jaitley told lawmakers.
On Tuesday, the Biju Janata Dal (BJD) on Tuesday joined the Trinamool Congress in dropping its demand that the Bill be referred to a parliamentary standing committee on finance, which cleared the way for it to be tabled in the Rajya Sabha.
Corporations have supported the move to make taxation simpler. If it clears the Rajya Sabha, where the ruling BJP is in a minority, there is still some way to go before GST can be implemented on the ground. "There is a lot of work which needs to be done in terms of preparation for the government such as appointment of a GST council, draft legislation, GSTN IT infrastructure, overall change management, etc. However, it will bring a lot of positivity around GST implementation in India. Of course, for the industry it means a lot of internal preparation is required within 11 months of time," said Pratik Jain, Partner, Indirect Tax, KPMG in a statement to HuffPost.
(With agency inputs)