GST roll out will be historic: PM

Won’t blink on GST launch, no excuse for biz not being ready: FM

21/06/2017

Lucknow, Jun 20: Prime Minister Narendra Modi today said that the roll-out of the Goods and Services (GST) tax from July 1 will be "historic" and the world will witness how political parties of different ideological hues came together to usher in this major reform.
He also strongly favoured making the country self-reliant in defence and technology sectors.
Addressing a gathering at the APJ Abdul Kalam Technical University (AKTU) here after inaugurating its new building, Modi said, "The roll out of the GST from July 1 will be historic. It will set an example for the world."
The prime minister said he was grateful to all those who had contributed towards the formation of a consensus over the tax reform.
I am grateful to all the vidhan sabhas, Lok Sabha, Rajya Sabha and political parties, Modi said.
"The world will witness a transformation (in India) and how all the political parties subscribing to different ideologies united for the implementation of the GST," he said.
The biggest tax reform since Independence, GST will re- shape India's business landscape by making the country an easier place to do business in and would bring down barriers between states.
It is all set to be launched at a grand function in the Central Hall of Parliament on the midnight of June 30.
GST over the medium to long term is expected to lead to higher revenues for the Centre and the states while also increasing the size of the economy and having a positive impact on the GDP.
It would unify the USD 2 trillion Indian economy and 1.3 billion people into a single market.
In his speech here, Modi also strongly favoured making the country self-reliant in defence sector.
"We are moving forward with the dream of how to make India self-dependent in the field of defence and security," he said.
Presently India imports upto 65 percent of its defence requirements, it is estimated.
Can we not make India self-reliant in defence sector?, the prime minister asked here.
"We are marching ahead with this dream and for this we have made policy changes and allowed 100 per cent FDI in defence sector," Modi said.
His impassioned plea to make the country self-reliant in defence sector came against the backdrop of the government recently finalising a policy under which private sector companies will be roped-in to manufacture hi-tech defence equipment like submarines and fighter jets in India in partnership with foreign entities.
Modi also lauded the Indian Space Research Organisation (ISRO) saying that "the world took notice when India launched 104 satellites. We have such potential and have to take it forward."
He said that India "reached Mars in a budget less than that of a Bollywood movie due to the technological advancement. Our expense to reach Mars was Rs 7 per kilometer."
Lauding scientists, Modi called them "modern rishis".
"Scientists are facing a challenge to produce cheap but effective drugs for the poor and needy. They are devoted to the objective of ridding the humanity of pain. Science is universal, but technology is local. We have to defeat diseases with science," he said.
Speaking here, Modi also appreciated the efforts of UP Chief Minister Yogi Adityanath in taking the state forward.
"Everyone is watching the developments in UP. They are curious about what is happening here. The Yogi government has intitiated steps to check the diseases and various hindrances prevalent in UP for years. I congratulate Yogi and his team for this," he said.
Earlier Modi also visited the premier CSIR-Central Drugs Research Institute (CDRI) here and evinced a keen interest in the research work conducted by the state-run institute.
Soon after arriving here on a two-day visit, the prime minister flew in a chopper from the Amausi airport to the CDRI complex.
During his 40-minute stay at the institute, he took a round of the two laboratories.
The prime minister even used a microscope to follow the experiments and also had a brief interaction with senior scientists.
CDRI officials briefed him about certain new drugs being developed by the institute for treatment of diseases like osteoporosis and malaria.
Modi as prime minister is the president of CSIR and this was his first visit to one of its labs.
He also planted a sapling of a medicinal plant in the CDRI premises, flanked by Governor Ram Naik and Chief Minister Yogi Adityanath.
On the first day of his visit to Lucknow, Modi also distributed sanction letters for houses under the Pradhan Mantri Aawas Yojana and inaugurated a 400 KV power line.
Hours before he landed in the state capital, UP police detained 22 persons were detained over apprehensions that there may be an attempt to block his convoy or create some other kind of disturbance.
"We have detained 22 persons apprehending that they might breach security during today's VVIP visit," Senior Superintendent of Police (SSP) Deepak Kumar said.
Those detained included some youth leaders belonging to the Samajwadi Party.
The government will not blink on rolling out the GST from July 1, Finance Minister Arun Jaitley said on Tuesday, emphasising that businesses cannot give any excuse for not being ready as enough time was given to them for preparation.
However, implementation of the Goods and Services Tax (GST), which will unify more than a dozen separate levies to create a single market, may result in "some disruption" and "technological glitches" initially as traders and the smallest of businesses will have to file returns online, he added.
GST, which was originally planned to be implemented from April 1 but was deferred by three months, will be launched at a grand function in the historic Central Hall of Parliament on the midnight of June 30.
The biggest tax reform since Independence, which will gradually re-shape India's business landscape by making the world's fastest-growing major economy an easier place to do business in, would bring down barriers between 30 states and unifying the USD 2 trillion economy and 1.3 billion people into a single market.
Jaitley said GST over the medium to long term will lead to higher revenues to Centre and states while also increasing the size of the economy and having a positive impact on the GDP.
"We should be prepared that when the switchover will take place. In the short-term, there will be some challenges," he said. "The reform step is for betterment. All reforms initially are seen as disruptive, and in the long run are seen as result yielding reform."
Jaitley said the process of registration of existing central excise, service tax and state VAT payers in the new system was "going on well".
"It is not a very complicated process," he said adding GST will check tax evasion and in the long run lead to rise in number of the assessees.
As many as 65 lakh assesses have already registered and more are expected to sign up. "65 lakh who have registered they did not face problem, the five who have faced problems are on Twitter," he quipped.
Ruling out deferring the rollout because of a small number of people who say businesses are not ready, he said when reforms are implemented "the first principle is you should never blink. If you blink, then you get derailed."
"We have for the last six months saying that the date is July 1. Nobody had any business to be not ready," he said.
Jaitley said the government has already relaxed the dates for filing of initial returns and traders and businesses now have time till September 5, instead of previous August 10, for filing the returns and being ready.
"There is still two and a half months to be ready, but if he (business) is still not ready, I am afraid, but he doesn't want to be ready," he said.
Reminiscent of India's tryst with destiny at the mid- night of August 14-15, 1947, Parliament's historic Central Hall will host an hour-long function on the intervening night of June 30-July 1 to mark the rollout of GST
Jaitley said the GST Council has arrived at tax rates on most of the commodities on the basis on "equivalence" so that incidence of tax remains at the current level.
"The tax rates that has been fixed, that will apparently lower our tax revenues. But we are hoping that even after reducing rates the revenues won't come down because evasion would be checked in an efficient system," he said.
Asked about GST's impact on inflation, he said when tax rates come down it also has an impact on inflation, but it would also depend on monsoon and oil prices.
"In some cases, because there are public interest involved, we have in fact brought down the tax rates. On first principle, Centre and states have suffered a revenue loss but we are hoping to make up for that loss because of more efficient system," he said.
The anti-profiteering clause is transient and should act as a deterrent. "I hope we are not compelled to use it," he said.
He said almost all states have cleared the State GST (SGST) Act, with the exception of Jammu and Kashmir and Kerala.
"I strongly believe that any state keeps out, both its traders and consumers will suffer loss. Because they will not get the benefit of input tax, they will have to pay tax twice and the consumers will get materials which is costlier than rest of the country. Also compensation package won't be given to states who do not implement GST," Jaitley said.
However, Centre is not considering any proposal for farm loan waiver, Finance Minister Arun Jaitley said today, a day after Punjab approved waiving of loans for nearly 10 lakh farmers in the state.
“There is no such proposal. We have got FRBM Act and fiscal deficit target, we intend adhering to it,” he said here.
In Union Budget 2017-18, the fiscal deficit has been pegged at 3.2 per cent, lower than 3.5 per cent in the last financial year.
The Fiscal Responsibility and Budget Management (FRBM) committee, headed by former revenue secretary N K Singh, has recommended keeping budgetary deficit at 3 per cent of the GDP in three years to March 2020.
It also suggested progressively reducing it to 2.5 per cent by 2022-23.
Despite a bumper crop this rabi season, farmers in many states are in distress because of sharp fall in prices in both domestic and global market.
Farmers in various parts of the country have been agitating, seeking higher support prices for their produce as well as waiver of loans.
The central government stance assumes significance against the backdrop of farm loan waiver already announced by Maharashtra and Uttar Pradesh even as the country recently witnessed violent protests from farmers in Madhya Pradesh demanding debt relief.
Uttar Pradesh was the first state this year to announce Rs 36,359 crore farm debt waiver for small and marginal farmers.
Punjab yesterday announced total waiver of crop loans up to Rs 2 lakh of small and marginal farmers, and a flat Rs 2 lakh relief for all marginal farmers, irrespective of the loan amount.
Jaitley had stated earlier that the central government will not partake in states’ fiscal leverage in waiving farm loans, and made it clear that the cost has to be borne by the states.
Reserve Bank Governor Urjit Patel has already warned of fiscal situation likely to be going out of hands if states keep doling out funds and may stoke inflationary expectations.
RBI keeps a close tab on retail inflation to decide on its monetary policy tools such as the repo rate – at which it lends to banks.

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