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10.33 pm: Hopeful that the government would be able to effect GST from April 1, 2017, says Subramanian.
10.30 pm: The man of the moment Chief Economic Advisor Arvind Subramanian says: "Ït will be a fruitful road going ahead. States will have to their own analysis on rates. I expect various GST laws to be introduced in the Winter Session."
10.20 pm: Tax experts say its time to include India Inc and the consumer in the GST debate. Rohan Shah, Managing Partner, ELP, says: "Let's not underestimate the work that has to be done. Now, the debate should include the industry and the consumer — high time that these two have a position at the table."
10.12 pm: Arun Jaitley addresses a press conference. "Every political party, except one, has supported the GST Bill. The proceedings have culminated to show the world that Indian democracy and federalism are at its best," he says, thanking political parties for unanimously supporting the biggest tax reform.
10.10 pm: Former Finance Minister P Chidambaram says more homework required by the government, a long way to go. "The government still doesn't know what consensus will emerge in GST Council."
10.05 pm: GST will make tax evasion difficult, the Finance Minister says.
10.00 pm: Finance Minister Arun Jaitley says it is a great day for Indian democracy. On behalf of the government, I thank all political parties. He adds, that the government will take the Bill back to the Lok Sabha soon.
9.55 pm: Sajjid Chinoy lines up a few ups and downs, but sums up the GST as a long-term benefit. Services tax rates will go up due to GST and demand for services may slow down temporarily. GST will lower logsitics costs. Though GST may be disruptive in near-term, India will benefit in the long-term, the Asia Economist at JP Morgan says.
9.50 pm: Naushad Forbes, CII Chief, says any rate over 20 percent will be inflationary.
9.45 pm: 203 'Ayes' for the GST Bill in Parliament.
9.43 pm: RAJYA SABHA PASSES THE GST BILL.
Clause-by-clause voting has taken place and the Upper House has approved the Goods and Services Tax Constitutional Amendment Bill.
Voting and Passing of The Constitution (122nd Amnd.) [GST] Bill, 2014: https://t.co/aKOmqKMxFx via @YouTube
— Rajya Sabha TV (@rajyasabhatv) August 3, 2016
9.40 pm: Many industries that have been crippled such as infra and logistics will get a boost says Rana Kapoor, CEO of Yes Bank. GST implementation will augur well for Indian economy's second take-off, he adds.
Anil Agarwal, Chairman of Vedanta, says GST will push up GDP by 1 percent.
9.35 pm: Tax evasion will come down due to GST, says Adi Godrej.
9.30 pm: Snapdeal CEO Kunal Bahl joins the bandwagon.
Welcome passage of #GSTBill! Digital commerce removed geographical barriers, GST will remove tax barriers. One India means faster growth.
— Kunal Bahl (@1kunalbahl) August 3, 2016
9.25 pm: India Inc Cheers GST. I expect GDP growth to go up by 1.5 percentage points. Industry will benefit, logisitics costs will come down significantly. Overall there'll be tremendous benefits with consumption and investments going up, says Adi Godrej, Chairman of Godrej Group.
9.22 pm: As GST development unfolds, markets will only go up, says Chokhani.
9.16 pm: Reactions now flowing in thick and fast. Manish Chokhani: "I would liken it up abolishment of the Licence Raj because this will lead to abolishment of the Inspector Raj".
"More than the FII inflows, this will lead to far more inflows in the form of FDI."
9.15 pm: "We are looking at borderless trades. This is a proud moment for the country," says a tax expert.
9.13 pm: The Bill was first mooted 10 years ago. The next steps: the GST Council will now be set up, the CGST, IGST and SGST Bills will be drafted. The latter two will now have to be ratified by at least 15 out of 29 states. The GST Bills will then come back to the Parliament, likely during the Winter Session.
9.10 pm: This is an important day in the history of this country. The passage of the Constitutional Amendment Bill is the first step that will make India a national market.
9.07 pm: THE RAJYA SABHA HAS VOTED IN FAVOUR OF THE GST CONSTITUTIONAL AMENDMENT BILL. 197 TO 0.
9.06 pm: The voting is about to get under way anytime now. The Secretary-General takes lawmakers through the procedure of voting.
9.03 pm: Will the Money Bill issue throw a late spanner in the works?
9.00 pm: Deputy Chairman PJ Kurien has asked for division of votes. The lobbies are being cleared now.
8.58 pm: The Rajya Sabha is now voting on the Bill.
For those who want to watch the action live:
8.52 pm: The Congress is in no mood to relent. Jairam Ramesh and Kapil Sibal now get up and reiterate that the government should commit to bringing in the GST Bills as Financial Bill.
8.46 pm: Chidambaram stands up once again seeking a categorical assurance from the government the IGST and CGST Bills will not be passed as Money Bills. Jaitley says he will go by Constitutional provisions but is not committal.
To remind our readers, a Money Bill (that which is only concerned with matters of taxation) can be passed only by the Lok Sabha, and does not need the Rajya Sabha's assent.
8.45 pm: The 13 MPs of the AIADMK, who have opposed the GST Bill in toto, have walked out.
8.42 pm: The FM says it is too soon to start deliberating upon the what the exact tax rate will be. "Today we are passing only an enabling resolution," he says, pointing out that the passage of the GST Constitutional Bill will lead to the setup of the GST Council.
"The GST Council will deliberate upon the tax rate, which will later be ratified by states."
The GST Bill will likely be taken up in Winter Session.
8.40 pm: This is by far the most informed and civilised debate that one has heard in a long time. Through the day, lawmakers took turns to express their concerns over the Bill while the FM now offers a point-by-point explanation.
The discussion has been over six hours and 40 minutes.
It is such a treat to hear a great civilised debate on GST in Rajya Sabha. I wish it could become the norm! @rajyasabhatv
— Dr. S.Y. Quraishi (@DrSYQuraishi) August 3, 2016
8.38 pm: Jaitley now addresses the AIADMK's criticism of the GST, which says the tax is in violation of Constitutional rights of states.
"This is not taking away powers. Under the GST, states will also have power to make laws."
8.36 pm: Meanwhile, the Finance Ministry has put up an FAQ explaining the basic concepts of the ambitious GST.
Frequently Asked Questions (FAQs) on Goods and Services Tax (GST) is available in https://t.co/CRLeq3VCsJ
— Ministry of Finance (@FinMinIndia) August 3, 2016
8.31 pm: FM now goes on to elaborate upon the dispute resolution mechanism.
8.28 pm: Chidambaram now starts talking. Two ace lawyers now making sharp legal arguments citing various clauses from the Constitution.
8.26 pm: The FM is in full flow, now explains why proceeds from the IGST will not go into the Consolidated Fund of India, dismisses Chidambaram's criticism that the GST Bill is "clumsily drafted".
Sh. Arun Jaitley's reply to the discussion on The Constitution (122nd Amnd.) [GST] Bill, 2014: https://t.co/IpD3VvZ1LA via @YouTube
— Rajya Sabha TV (@rajyasabhatv) August 3, 2016
8.20 pm: FM now takes on the the criticism that the BJP delayed the GST when it was in opposition.
"If we put the 2011 version of the GST Bill before the House and states," Jaitley says. "There was no concrete provision for compensation of losses arising out of GST."
"In fact, even when we came into power into 2014, many states including Gujarat were still opposing the Bill because they were not sure about compensation."
"It was only after I cleared dues arising out of CST's 2005 rollout that states came on board."
8.15 pm: The FM treads cautiously on the benchmark tax rate and is not willing to box himself into a corner with any commitment.
"The 18 percent recommendation of the CEA's report were on the basis of some assumptions, which some states do not agree with," he says.
"The tax rate will have to calculated on the basis of a rigourous arithmetic calculation," he adds.
8.10 pm: The FM says that the average rate currently on manufactured products is over 30 percent for a majority of goods.
"There will be three changes that will come in after the GST is passed. Evasion will become very effect, there will be no cascading taxes, and the average tax rate will come down," he says.
8.05 pm: "However, there is still some need to for us to explain how a post-GST tax system should work."
Jaitley then goes on to address the dispute resolution mechanism, which was the subject of some discussion today. "States will have two-thirds majority in the GST Council."
8.02 pm: Finance Minister Arun Jaitley is now speaking. "All parties except one have expressed support."
7.59 pm: The discussion is not yet wrapped up. Two more speakers left.
7.58 pm: A key takeaway by analysts is how Chidambaram's statement that the GST rate should not exceed 18 percent has put pressure on the government.
This, as Sadanand Dhume notes, is a bit of a role-reversal for a percieved left-of-centre (Congress) and a right-of-centre (BJP) party.
One of the ironies of India's #GST debate is how allegedly right-of-center BJP has let Congress emerge as a champion of lower tax rates.
— Sadanand Dhume (@dhume) August 3, 2016
7.56 pm: Lawmakers now quibbling over how much airtime each party was alloted.
7.51 pm: Sharma implores the government to bring petroleum products and alcohol under the GST's ambit. (The former is in under the GST but is zero rated while the latter is kept out.)
"Together, these two contribute about 20 percent to the total tax collection. Without petroleum products being included, there can be no true GST."
7.49 pm: Other lawmakers now getting impatient. "Till when wlll this debate go on," someone says. Sharma ignores the jibe and continues on.
7.45 pm: Meanwhile, even the Rajya Sabha debates the GST Bill, the Cabinet is quietly doing its own work. It has made two key decisions: it has approved amendments to the Motor Vehicles Act and approved flat 3 percent spectrum usage charge for next round of auction.
7.40 pm: If you want to watch the historic debate that is currently under way, here is is.
7.30 pm: Congress MP Anand Sharma is now speaking. The debate has now been running more than five hours. Voting is expected sometime late this evening.
Despite the mood of bipartisanship prevailing in the Rajya Sabha, Sharma is not holding back punches, says PM Modi must be present in the Upper House and express regret over his attacks on the GST when the BJP was in opposition and the Congress was trying it push it through.
7.20 pm: The GST, however, is likely to pass even without the AIADMK's support.
7.18 pm : If Centre doesn't respond to AIADMK's concerns, the party will not support the Bill, Pandiarajan says. AIADMK has 13 members in Rajya Sabha.
7.15 pm: First reactions coming in from AIADMK.
AIADMK spokesperson K Pandiarajan says Parliament has the authority to reduce compensation and the BJP and Congress seem to be against fiscal autonomy for states.
The bill doesn't address AIADMK's issues and in current for is illegal and unconstitutional. Centre should realise that they can't bulldoze through the Bill just because it has Congress's support. India can not gain at the cost of states, he adds.
7. 00 pm: Legendary batsman and Rajya Sabha member Sachin Tendulkar said making GST a reality is only a matter of time.
One nation one tax, making #GST a reality is just a matter of time! Look forward to #GST delivering the benefits.
— sachin tendulkar (@sachin_rt) August 2, 2016
6. 42 pm: Construction, transport and logistics segments are Dehn's picks. These segments will see benefits of GST implementation, he says.
6.40 pm: More views coming in from Dehn. If GST Bill is not passed, it will lead to a souring of investor sentiment, he cautions.
6.35 pm: Moving towards a single tax structure important for long-term growth and GST will validate current valuations in the market says Jan Dehn of Ashmore. More importantly, this is probably the most profound tax reform India could undertake. It will change an unfair perception that emerging markets do not undertake reforms, he says.
6.33 pm: Earlier in the day in Parliament, former Finance Minister P Chidambaram stressed on the need to cap GST at 18 percent.
Chidambaram: Need to cap #GST at 18%
Full report >> https://t.co/WA7rAW5YdN pic.twitter.com/H1nbWTTPER
— Rajya Sabha TV (@rajyasabhatv) August 3, 20166.30 pm: Pawan Goenka of Mahindra & Mahindra asks for having faith in the government. He says the government is receptive to views, let's be positive, he says. Any rate between 18-20 percent is acceptable, Munjal says.
6. 25 pm: Karnataka looks to set a precedent. We will loose revenues on the manufacturing front but losses will be compensated. National interest is higher in this context says RV Deshpande, Industries Minister, Karnataka.
5.45 pm: Meanwhile, even as the Rajya Sabha slugs it out, here's a view from economist M Govinda Rao, former director of National Institute of Public Finance and Policy (NIPFP).
An NIPFP study had originally pegged the ideal GST rate at around 27 percent. Rao still believes that the assumptions of report by Arvind Subramanian panel were based on "very optimistic assumptions" of widening of the tax base.
Rao adds that the ideal GST rate would be around 22 percent though the government should "take a risk" and bring it at around 20 percent.
5.20 pm: However, even as the GST will almost uniformly be a positive for the manufacturing sector, some concerns remain on its impact on the services sector, which anyway enjoys a low tax rate currently.
Seshasayee says that the GST should be able to define and identify the value-added concept, "because in the case of service companies, two teams working across states or countries may come together and collaborate to create value."
"Thus the GST should be able to tax this efficiently," he says.
5.15 pm: Former FICCI President Siddharth Birla says the "devil will be in the detail" of the GST Bill and said the government should ensure tight drafting to plug as many loopholes as possible.
5.10 pm: "The Bill is indeed transformative in nature," says Infosys Chairman R Seshasayee, but he cautioned that the Centre should be cautious about its role of distributing funds it collects on behalf of the states. "Also, the Centre should be cognizant of the fact that some states have special needs and the GST must have provisions for it."
5.00 pm: Independent Rajya Sabha MP Rajeev Chandrasekhar is now speaking. He says the GST is a work in progress and will evolve over time and urges parties to support the Bill.
4.45 pm: Meanwhile, the debate continues in Rajya Sabha. NCP's Praful Patel is now speaking.
"For far too long, he have too many taxes. The kind of structure under which businesses was operating needs to be changed and the GST is a step in the right direction," he says, pointing out that the government should be mindful of its inflationary aspect in the near term.
The average tax rate on services in the country has been pegged at about 14 percent while that on manufacturing is about 28 percent. The standard GST rate is expected to come in at 18 percent.
4.30 pm: There have been concerns that the rollout of GST will be inflationary -- a similar experience was seen in Malaysia, even though it was introduced at 6 percent last year. Ex-FM Chidambaram touched upon this when he implored the government to keep as low a GST rate as possible so as to contain its inflationary impact.
But CRISIL Chief Economist DK Joshi said any inflationary spike will be temporary.
4.27 pm: The IGST will be levied on inter-state transactions and international trade, explains Kothari.
4.24 pm: Nihal Kothari, Executive Director, Khaitan & Co, explains how the GST will work between the state and centre.
"There will be three different taxes: state GST (SGST), central GST (CGST) and integrated GST (IGST)," he tells CNBC-TV18. "While the states and centre will collect and keep the SGST and CGST, respectively, the Centre will collect IGST on behalf of the states and give it to them."
4.18 pm: Even as the debate continues in the Rajya Sabha, expert reactions have started coming in, who believe that the tone of the debate indicates that the GST Constitutional Amendment Bill is as good as passed.
4.05 pm: Yechury articulates the need for balancing federal interests with the ease of doing business that GST will usher in. "We are making a radical departure from the way tax revenues are collected in this country," he says, repeating other parties' demand to not bring in the GST Bill as a money bill.
4.00 pm: Sitaram Yechury of the Left, which had till recently appeared to have not made up its mind on the GST, is now speaking.
3.50 pm: JD(U)'s Sharad Yadav is now speaking. Like every other party, the JD(U) is trying to take the most credit for the passage of the bill. "We were always in support of the GST".
He also cautions the government to not try and pass the GST Bill (which will be taken up during the Winter Session following the passage of GST Constitutional Amendment Bill today) through the money bill route.
3.48 pm: "The Congress says is it is for the 'idea' of GST. We are for its implementation," he says, even as he berates the party for its delaying tactics over its rather dubious demand of inclusion of GST rate in the Constitutional Bill. He then concludes the bill.
3.45 pm: O'Brien is hitting it out of the park, comes up with novel names for the GST, such as "Girgit Samjhaota Tax" and "Go-Slow Tactics", even as he asks the BJP and the Congress to not indulge in further politicking over the passage of GST.
3.40 pm: O'Brien pulls out statements from both Prime Minister Narendra Modi (when he was Gujarat CM), FM Jaitley (as leader of opposition) and former FM Chidambaram who have both opposed the GST when they were in opposition.
3.38 pm: TMC's Derek O'Brien is now speaking. While maintaining that the TMC has always been consistent in its support for the Bill. He takes aim at the both the Congress and BJP, for "playing ping-pong" with the Bill and forcing its delay when they were each in the opposition.
3.33 pm: The GST Constitutional Amendment Bill, however, is expected to be passed even without AIADMK support.
The Bill will need to pass muster with two-thirds majority (164) in the 245-member -strong Rajya Sabha. The NDA has strength of 71 members while the UPA has 63 members. Non-allied parties (TMC, NCP, DMK, Left, SP, BSP, JDU) could chip in with another 65 votes. That would make it about 200 votes.
Read the number-crunching here.
3.30 pm: Being a destination-based tax rather than a source-based tax, the GST is believed to be a negative to manufacturing states like Tamil Nadu, Gujarat and Maharashtra while consuming states like Delhi will gain.
However, the government has promised to make good any losses that states face for a full period of five years.
Of course, because the standard GST rate will be net-net revenue neutral, the combined revenue of Centre and states will be the same as they are currently.
3.25 pm: A Navaneethakrishnan of AIADMK is now speaking. "We strongly oppose this GST Constitutional Amendment Bill. It will lead to grave revenue loss for the Tamil Nadu government," he says. "Democracy and federalism are the basic feature of the Constitution. This Bill violates these basic rights of the Constitution. The Parliament has no legislative competence to enact this Bill."
The AIADMK, which has long had concerns over the GST Bill, has moved amendments to the GST Bill, seeking, among other things, an additional 4 percent tax on inter-state movements of goods if the GST is passed.
3.18 pm: The Centre should also ensure that the GST should not meet the same fate as VAT, which suffered from differential rates on same products in different states.
3.15 pm: "I would implore the government to provide a clear roadmap how the tax will be rolled out by April 1, 2017. We also need a commitment that the GST Bill will not be passed as a Money Bill," says SP's Yadav.
3.10 pm: SP's Naresh Yadav is now speaking in the Rajya Sabha. He repeats the Congress' demand of strengthening the dispute resolution. He says this can be done by giving states more say in the GST Council.
3.00 pm: Meanwhile, even as the GST itself is a huge long-term winner, the short-term impact be somewhat negative, as it could lead to a spike in inflation, according to CLSA.
This could actually hurt the BJP's poll prospects in the 2019 elections, the research firm adds. Read more here.
2.56 pm: "For the world, India is a huge market. But we have created 29 different markets, thanks to our existing tax system," Yadav says. "India will become one national market because of GST."
2.53 pm: Today, if a company wants to start manufacturing, it is faced with the prospect of the intimidating taxes in the form of input taxes, octroi and sales tax among others, says Yadav. "The GST will replace this maze of taxes and ease manufacturing."
2.50 pm: Bhupender Yadav, BJP RS lawmaker from Rajasthan, is now speaking. A clear reconciliatory tone is evident between the two national parties.
"This is becoming possible because of the PM's revolutionary idea of 'Team India' [comprising the prime minister and state chief ministers]," Yadav, who was Chairman of the GST Select Committee, says.
2.46 pm: "Tomorrow when the rate comes, the standard rate should not be more than 18 percent. [If it is more] we will campaign against it throughout the country," Chidambaram says, before seeking an assurance from the FM that the GST Bill will not be passed as a Money Bill. (A Money Bill does not needs the Rajya Sabha's assent.)
He then concludes his address.
2.43 pm: "A high rate will lead to inflation, tax evasion and an imperfect tax system," says the former FM. "The reason we have let go of our demand of inclusion in the GST rate in the Constitutional Bill because the government itself is not clear on what the revenue neutral rate."
2.36 pm: The highest rate of GST even in rich countries is about 16 percent, says Chidambaram.
"The standard rate of the GST, pointed out by the Chief Economic Advisor's report, should not be more than 18 percent."
He then harps upon the Congress' staple demand -- and says the government should cap the rate at 18 percent.
"Even if it is not included in the Constitutional Bill, it should be ensured the GST Bill that will be tabled later."
2.31 pm: "I now come to the most important aspect of the GST: the tax rate," Chidambaram says. "The GST is an indirect tax, which by nature is a regressive tax as it taxes the rich and poor at the same rate. A poor and a rich man will pay the same tax when he purchases a soft drink."
"So even as any government wants to maximise its tax revenues, rates of indirect taxes should be kept as low as low as possible while protecting government revenues."
2.27 pm: The former FM holds forth on minutae of the Bill, with his legal and financial acumen shining through, as he implores the government to still look to further strengthen the dispute resolution mechanism.
2.22 pm: The GST in its current problem is not an ideal Bill. There are still many issues that need to be resolved, says Chidambaram. "It suffers from clumsy drafting," he adds, pointing to the legal lacunea in the Bill missing out on specifying that funds will be deposited to the Consolidated Fund of India.
But he thanks the government for dropping the 1 percent additional tax proposal. "It would have led to cascading tax and led the tax to be imperfect."
2.20 pm: "Let me make it clear: The Congress party was never opposed to the idea of GST. I think the country is now ready to embrace the idea of GST."
2.17 pm: Former FM P Chidambaram, recently elected to the Rajya Sabha, starts speaking. "Today, if we pass this Bill, it will be on the basis of serious discussion and I thank the Finance Minister for mentioning the role that UPA played in first mooting the idea of the GST."
2.15 pm: Jaitley concludes his speech and presents the Bill for passage.
2.11 pm: "GST is one of the most significant reforms ever undertaken. It will broaden the tax base, reduce cascading taxes (tax on tax) and boost growth," Jaitley says.
2.08 pm: Jaitley elaborates upon the design of the GST, stresses upon the need for balancing federal interests as well as that of the Centre. He also talks about the features of GST, pointing out that for now, consumable alchohol has been kept out of its ambit while petroleum products have been zero-rated for the next few years.
Going forward, the GST Council will able to change this.
2.05 pm: "We have been able to achieve as far a consensus as possible if not unanimity," Jaitley says, as he thanks parties and lawmakers who are present.
2.02 pm: The Finance Minister talks about the history of the Bill, which was first mooted about a decade back in 2006 by erstwhile FM P Chidambaram.
2.00 pm: Finance Minister Arun Jaitley has started speaking in Parliament, where he has moved amendments to the previous GST Constitutional Bill.
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