The government hopes to pass the landmark Constitution Amendment Bill for a national Goods and Services Tax (GST) as well as the bankruptcy and insolvency bill in the second half of the Budget session beginning April 20, Finance Minister Arun Jaitley said Sunday.
The GST bill has already been passed by the Lok Sabha and is pending ratification by the Upper House, where the ruling NDA does not have a majority. After it is approved by the Rajya Sabha, the legislation needs to be ratified by half of the 29 states so as to roll out GST possibly by October 1.
“The current session of Parliament has already seen one landmark legislation two days ago. And I do hope to see another two being passed in the second part of the session with regard to the bankruptcy and insolvency laws and GST,” he said at the Advancing Asia Conference here.
The Parliament had last week passed the Aadhaar Bill, providing statutory backing to the unique identification number for transferring government subsidies and benefits. Also, the Real Estate Bill was approved by the Rajya Sabha.
Once the GST and the bankruptcy and insolvency laws are approved, “I think this gives major fillip or push to our reform process” even in an otherwise weak global scenario, Jaitley said.
Exhibiting determination to move on the reform path, India can provide a significant amount of growth to the world, he said.
“We are trying to have special emphasis now both in terms of legislative changes and resources being put to strengthen the banking system. I do feel that next few months, in bringing about structural change, are going to be extremely important,” the minister said.
Stating that India has its own share of problems, Jaitley said there was increased determination in the country to face the challenges and accelerate the pace of reforms so as to continue to grow.
“Our growth model is based on concerns to eradicate poverty,” he said.
The Constitutional Amendment to GST, India’s biggest indirect tax reform since independence, seeks to replace a slew of central and state levies, transforming the nation of 1.3 billion people into a customs union.
The Bill is supported by all parties barring Congress, which has 67 MPs in Rajya Sabha and All India Anna Dravida Munnetra Kazhagam (AIADMK) with 12 members.
Congress, the original author of the tax reform, is opposed to the current “flawed” version and wants GST rate to be capped at 18 per cent, a proposed state levy scrapped and an independent mechanism to resolve disputes on revenue sharing between states.
The government has support of 155 members in the 242-member Rajya Sabha, short of two-third or 162 votes needed to approve the Constitution amendment bill.
The Insolvency and Bankruptcy Code 2015, which will replace the existing bankruptcy laws, aims to enact a comprehensive law to deal with insolvency of corporates and simplify investors’ exit.
The proposed law will cover individuals, companies, limited liability partnerships, partnership firms and proposes a time-bound framework — 180 days, extendable by another 90 days.
Currently, it takes, on an average, more than four years to resolve insolvency in India.