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Parliament meets: PM Modi emphasises the importance of clearing GST

By FnF Correspondent | PUBLISHED: 09, Mar 2017, 13:05 pm IST | UPDATED: 09, Mar 2017, 14:07 pm IST

Parliament meets: PM Modi emphasises the importance of clearing GST New Delhi: As parliament begins its month-long session today, Prime Minister Narendra Modi emphasised the importance of clearing the landmark reform, the national Goods and Services Tax (GST), which the government wants to roll out on July 1.

The PM said he seeks the opposition's cooperation and "a breakthrough on GST."

This weekend, the Finance Minister said the measure is on track - but much will depend on how much the opposition cooperates - and that, in turn, will be influenced by the results that will be shared on Friday from five states, including Uttar Pradesh, that have just voted.

To meet the July 1 deadline for introducing the GST, parliament must pass three bills, which spell out the operational details of the new tax, before its current session concludes on April 11.

The long-awaited GST will replace a slew of central and state levies, transforming Asia's third-largest economy into a single market for the first time.

Proposed tax rates range from five to 28 per cent, with 12 per cent and 18 per cent being the standard rates.

It has not been decided yet which tax rates will apply to which categories of goods.

The three bills that need to be cleared will be introduced as Money Bills - which means that once they are cleared by the Lower House or Lok Sabha, the Rajya Sabha or Upper House can only recommend changes, not insist on them.

The government has a huge majority in the Lok Sabha, so the bills will not encounter any difficulty there.

But the challenge will lie in the Rajya Sabha, where the government is in a minority, and where, in the past, the opposition, especially the Congress, has created frequent disruptions to stall legislation. Technically, Money Bills can be cleared even without a discussion on the Upper House, but the opposition will allege that violates basic democratic principles for a reform as crucial as the GST.

The GST is expected to make business simpler and reduce business transaction costs. The Congress has said in the past that it will not accept the rate of tax being presented in a Money Bill, which would not need the Rajya Sabha's approval.

In August last year, parliament cleared GST, delivering a huge victory for Prime Minister Narendra Modi. Half of India's 29 state legislatures need to pass the same act - this has been done.

The three new laws to implement the tax will similarly have to be cleared by state legislatures after they are approved by parliament.

English rendering of the PM Narendra Modi’s address to media ahead of the Second round of the Budget Session of Parliament

Welcome friends,

All of us are back together once again after the recess during the Budget Session of the Parliament. There will be detailed discussion on the Budget and I am sure the level of debate and discussion will be of good quality. It will be focused on the issues pertaining to the welfare of the poor. We are hopeful of a breakthrough in the GST. One of the reasons for our optimism is that all the states have cooperated in a positive manner.

All the political parties have also been extremely positive and cooperative in their response. We have been able to move forward in this direction after arriving at a consensus on certain decisions subsequent to detailed discussion on this issue in a democratic manner. The efforts are on to enlist the co-operation of  all to ensure that GST is in place by this session. I am extremely thankful to all of you once again.