Initial difficulties likely over GST, says Jaitley

Finance Minister Arun Jaitley on Tuesday said people may have to face some difficulty initially as the GST is rolled out but in the long run the new indirect tax regime would help cut tax evasion and check price rise.

He also said the GST Council will look at bringing real estate within the GST net by next year and revisit taxing of petroleum products under the new regime in 1-2 years.

"To begin with, people could face some difficulties because any changeover has its own problems. But it will settle down and the country will benefit from the new indirect tax regime," Jaitley said at an event organised by ABP News.

The Goods and Services Tax (GST) will be launched on July 1 and will subsume a host of indirect levies like excise, service tax and VAT.

While products like kerosene, naphtha and LPG will be under the ambit of GST, five items -- crude oil, natural gas, aviation fuel, diesel and petrol have been excluded from the basket for the initial years.

Jaitley said that while negotiating with the states on GST there were some "tough" issues like petroleum and potable alcohol on which states were unwilling to leave their taxation powers.

"If we insisted on that, then the deal would have been broken. The Constitution amendment provides that petroleum products can be taxed under GST as and when GST Council decides. And once GST is implemented, in 1-2 years once again the Council will get opportunity to revisit it," he said.

Jaitley said he personally was in favour of a proposal mooted by Delhi Deputy Chief Minister Manish Sisodia to bring real estate under GST, but few other states were not in favour.

"It was then decided that let GST be implemented first, and then after one year we will deliberate on this again," he said.

Jaitley also asked the Congress to refrain from indulging in politics over the GST’s launch, saying all decisions with regard to the new tax regime were taken unanimously by the GST Council.

The GST Council, he said, is the first federal institution which is chaired by the Union finance minister and has representatives from all states.

The government is planning to launch Goods and Services Tax (GST) at the midnight of June 30-July 1 from the Central Hall of Parliament. President Pranab Mukherjee, Vice President Hamid Ansari, and Lok Sabha Speaker Sumitra Mahajan will be present, along with members of Parliament.

Jaitley has already invited former prime ministers Manmohan Singh and H D Deve Gowda to attend the event.

When asked about the Congress party being non-committal about attending the event, Jaitley said, "I don't know what they will do. All decisions (on GST) were taken collectively and we want the launch programme to reflect the collective nature of our polity.”

Jaitley said GST is for the entire country and all political parties have supported the GST Constitutional Amendment Act in Parliament. All states sans Jammu and Kashmir have passed the State GST (SGST) act.

"It is for entire country, and President would be there and there should be no politics over it," Jaitley said at the 'GST Sammelan' hosted by ABP News.

"GST Council is the first federal institution where every decision was taken by consensus. No decision was taken on the basis of UPA Vs NDA, or on the basis of politics. All decisions were taken keeping in mind the benefits to the country and traders," Jaitley said.

The Congress has remained non-committal about attending the event to mark the launch of GST in the Central Hall of Parliament. GST will subsume 16 different taxes.

AICC chief spokesperson Randeep Surjewala on Monday that said the Congress was considering whether to attend the meeting and suggested that it had not given any concrete assurance to the government on its participation.

"The Congress party is examining various aspects of the issue, including the manner the GST is being implemented causing harassment to the common people, the unorganised sector and small businessmen," Surjewala said.

The historic Central Hall of Parliament will host a midnight function on 30 June to launch the sweeping tax reform measure, reminiscent of India's tryst with destiny at the midnight of August 15, 1947.

The government will use the circular-shaped Central Hall, perhaps for the first time, to launch a new taxation system that is set to dramatically re-shape the over $2 trillion economy.

The launch event will, in all probability, start at 11 pm on June 30 and extend into midnight, coinciding with the rollout of the GST regime.

The GST Bill was originally piloted by Mukherjee when he was the finance minister in the previous UPA regime.