After an over seven hour-long debate, the Rajya Sabha today passed the long-pending Goods and Services Tax.
There will be no cascading effect of tax on tax. In Consumer Price Index basket 55 per cent items are tax-exempt, 32 per cent are at a low rate, only 12 per cent at a standard rate.
Since the Bill was passed in the Lok Sabha last year, there have been major amendments to it. So it will go back to the Lok Sabha for approval.
Once approved by both the houses, the final draft will go to the state assemblies where the government needs atleast 50% of the 29 state assemblies to ratify the Bill before it is accepted.
Once the Bill is ratified by the states, it will pave the way for the establishment of a GST council to finalise key things like the GST rate, indirect taxes that will be subsumed under GST, etc.
The roll-out seems not possible before October 2017. A huge IT system has to be set up, tax collectors and officials have to be trained.
