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GST: 17-year-journey of missed deadlines and shifting political goalposts

With the tabling of four GST Bills in the Lok Sabha, the journey of goods and services tax enters its last lap. Meeting the deadline of July 1 seems a definite possibility.

It has been a marathon journey of the most crucial tax reform in the country. The journey started in 2000 when there was an NDA government at the Centre with Atal Bihari Vajpayee as the Prime Minister.

Acting on the advice by his economic advisory panel of IG Patel, Bimal Jalan and C Rangarajan, Vajpayee set up a committee headed by the then finance minister of West Bengal Asim Dasgupta - a CPI-M leader - to design a GST model.

The Asim Dasgupta committee was also tasked with putting in place the back-end technology and logistics for rolling out a uniform taxation regime in the country.

In 2003, Vajpayee government formed a task force under Vijay Kelkar to recommend tax reforms.


The Vajpayee government was replaced with Manmohan Singh's UPA-I government in 2004. The new government sped up the process.

In 2005, Kelkar committee recommended rolling out GST as suggested by the 12th Finance Commission. Presenting his budget, the then Finance Minister P Chidambaram echoed the sentiments for bringing in GST regime.

In February next year, Chidambaram set April 1, 2010 as the deadline for introducing GST. Meanwhile, the Asim Dasgupta committee kept working and preparing the ground work for the GST.

Chidambaram retained the April 2010 deadline for implementing the GST in his successive Budget speeches.


In 2009, Pranab Mukherjee became the Finance minister and announced the basic structure of the GST, as designed by Asim Dasgupta committee. Mukherjee too retained the April 2010 deadline, which, many rightly suspected, was not possible under the given circumstances.

The BJP opposed the basic structure of the GST on many counts. The BJP ruled states raised objections.

In February 2010, the finance ministry started large-scale, what it called mission-mode computerisation of commercial taxes in states. The project was to lay foundation for the GST.

On April 1 that year, the GST deadline was missed.

Asim Dasgupta committee kept working. In one of the interviews, Dasgupta said that by the end of 2010, the committee had completed 80 per cent of the GST work.


In 2011, the government tabled a Constitution Amendment Bill in the Lok Sabha to provide for the GST. The BJP opposed. It got the Left on its side. Other Opposition parties also raised objections.

The GST Bill was sent to the parliamentary standing committee headed by Yashwant Sinha, who was the Finance Minister when Asim Dasgupta committee was constituted.


Meanwhile, Mamata Banerjee's TMC unseated the three-decade-old Left Front in West Bengal. Asim Dasgupta resigned as the chairman of the committee and was replaced by senior Congress leader and the then Finance Minister of Kerala K M Mani.

In 2012, during the deliberations in the parliamentary standing committee, the BJP and the Left objected to extra discretionary power to the Centre over GST dispute authority.

With Pranab Mukherjee moving to the Rashtrapati Bhawan in 2012, Chidambaram held a series of meetings with the state finance ministers. They set another deadline of December 31, 2012 to iron out all their differences.

In February 2013, Chidamabaram announced in his Budget speech that the government had set aside Rs 9,000 crore to compensate states for losses incurred due to GST. Meanwhile, the parliamentary standing committee submitted its report on GST. The Amendment Bill for introducing GST was ready for introduction in Parliament.

Two months later in October 2013, the then Narendra Modi government of Gujarat opposed the GST Bill. Gujarat claimed that it would have to incur over Rs 14,000 crore losses every year due to GST. This argument changed forced the BJP change its political narrative of the GST.


The parliamentary elections were held in 2014 and with the dissolution of the 15th Lok Sabha, the GST Bill - approved by the standing committee for reintroduction - lapsed.

Seven months after the formation of the Modi government, Finance Minister Arun Jaitleyintroduced the GST Bill in the Lok Sabha. It was now Congress's turn to object.

In February 2015, Jaitley set another deadline of April 1, 2016 to implement GST. In May 2015, the Lok Sabha passed the Constitution Amendment Bill paving way for GST.

Now in opposition, the Congress demanded that the GST Bill be sent to the Select Committee of the Rajya Sabha.

Over the next more than a year, the ruling and Opposition parties held back GST over several issues including those of having a capping taxation rate and according constitutional status to the GST. Finally in August 2016, the two sides agree to pass the Amendment Bill.

In next 15-20 days, 18 states ratify the GST Bill and President Pranab Mukhejee gives his assent to it. In the same month of September, President Mukherjee constitutes the GST Council, which frames five GST Bills.


Finance Minister Arun Jaitley today tabled four GST Bills today in the Lok Sabha. The Union Cabinet cleared all the four Bills earlier last week.

The Bills are - the Central Goods and Services Tax Bill 2017 (C-GST), the Integrated Goods and Services Tax Bill 2017 (I-GST), the Union Territory Goods and Services Tax Bill 2017 (UT-GST) and the Goods and Services Tax (Compensation to the States) Bill 2017.

These Bills require to be passed by Parliament while the State Goods and Services Tax Bill 2017 will go to state Assemblies. They need to be separately passed by 29 Assemblies to have GST as the new tax regime in the country.

As per the Constitution Amendment Act, the government is bound to roll out GST by September 15 else it will lose the legal backing to collect taxes from September 16.

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