'Next parliamentary session crucial; GST deadlock may break'

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SME Times News Bureau | 04 Jan, 2016
Finance Minister Arun Jaitley on Saturday hoped the Goods and Services Tax (GST) Bill will be passed during parliament's budget session beginning next month as the numbers in the Rajya Sabha would favour the government by then.

He also said that retrospective taxation scares away both domestic and foreign investors who wish to invest in the country.

"Among the states, there is a complete consensus now (on the bill). Between political parties, it is no secret that there is virtually a consensus... everybody supports it but parliamentary obstructionism has prevented it from happening in the last few sessions," Jaitley said while addressing trainee officers of the Indian Revenue Service here.

"The next session is going to be extremely important; halfway through the next session, the numbers (of members of different political parties) in the upper house (Rajya Sabha) are also going to change. I am reasonably optimistic as far as the next (parliament) session is concerned... that we may be able to push the bill through," he added.

The budget session of parliament will begin in February-end. The GST Bill was passed in the Lok Sabha in May 2015.

The government is expecting improved numbers in the Rajya Sabha in April 2016 since a number of Congress members are retiring in March and April next year.

In March, five nominated members of the upper house are retiring. The BJP-led government will get to nominate new members.

Jaitley said after the Rajya Sabha's nod to the bill, three more bills were required and these had been worked out.

"We are in a state of readiness as far as those legislation are concerned, which will have to be passed by the central government and one by the state governments," the minister said.

He said implementation of GST was already late in the country.

Regarding the retrospective tax, he said: "If you ask me four-five years later regarding the Income Tax Act's provision for retrospective tax, whether it helped or hurt India, my answer is very clear: They hurt India."

"At the end of the day, we were not able to collect those taxes and we scared the investors away. Investors want stability, they want predictability. This applies to both domestic and international investors. When they put in their money, they want to know how much tax they will be charged. They don't want to invest in a jurisdiction where there is uncertainty," Jaitley added.

Jaitley said that maintenance of fairness in taxation was also important.

"If we lean either way, we may unfairly lose revenue or may unfairly tax an assessee. Unfairness either way has to be avoided," the finance minister said.