Challenging to roll out GST from April 2017: Raghuram Rajan

Meghwal said after 50 per cent of the states ratify the constitutional amendment bill, three laws – central GST, inter-state GST and state GST – will be formed.

Welcoming the Governments initiative to bring in structural changes to the tax regime in India through the Goods and Services Tax (GST) bill, CS Mamta Binani, President ICSI in a press conference said, GST is one indirect tax for the whole nation, which will make India one unified common market.

In its third bi-monthly monetary policy review, the RBI said the passage of the GST Bill “augurs well” for the growing political consensus for economic reforms and will boost business sentiment and eventually investment. It will be then sent to the GST Council which will decide on the new tax rate as well as centre and state taxes that will be subsumed in the new tax regime. “A reasonable rate of even 20 per cent would ensure that there is no need for any price control or anti-profiteering regulation that has been introduced in some countries to mitigate the impact of GST”, said a person familiar with the issue. “We have to see that price adjustment, if there is one, doesn’t become generalised inflation”, he said.

A government-appointed panel has suggested a standard GST rate of 17-18 per cent, but Indian states want a higher level.

“Secondly, the large part of CPI basket will be outside, and the durable impact on it is likely to be limited”, Mr Patel said.

The CII welcomed the amendments proposed by the Government including deletion of the clause relating to levy of an additional one percent tax on supply of goods, full compensation for five years for any revenue losses arising from a transition to GST, and setting up of Dispute Resolution Authority by the GST Council, among other things.

“We are targeting April 1, 2017, for GST implementation”. The RBI is now focused on meeting the glidepath target of 5 per cent by March 2017.

Speaking to mediapersons in Kolkata on Wednesday, Binani said, “I think there will be no inflationary pressure if the RNR under the GST regime is fixed between 18% and 20%”.

Notably, Goods and Services Tax Bill, commonly known as GST Bill, was first passed by Rajya Sabha after a long debate and later it was passed by the Parliament.