India vows to launch major tax reform on schedule

GMT 19:27 2015 Thursday ,13 August

Arab Today, arab today India vows to launch major tax reform on schedule

Arun Jaitley
New Delhi - AFP

India's Finance Minister Arun Jaitley said Thursday his government was determined to launch a landmark national sales tax on schedule, just hours after a chaos-hit parliament shut down without passing the bill.

Jaitley left open the option of reconvening the just-ended session of parliament to push through the long-awaited bill, one of the biggest economic reforms in decades aimed at boosting growth.

"We are determined that it be implemented on April 1," Jaitley told reporters in New Delhi, referring to the government's deadline to implement the Goods and Services Tax (GST) next year.

"We haven't prorogued the house yet... we haven't yet decided on that," Jaitley said.

Prime Minister Narendra Modi has made the bill a key reform to revive Asia's third largest economy, by replacing a myriad of complex state and national levies with a single tax across internal borders.

But Modi failed to secure support for the bill in parliament which was hit by days of a bitter ruckus by the opposition demanding the resignation of three of his colleagues over scandals.

With the bill now stuck in parliament, the government faces running out of time to introduce the tax by the April deadline. The bill must also be ratified by at least 15 states before it becomes law.

Jaitley suggested parliament could be reconvened before the winter session scheduled for late this year.

He also launched a scathing attack on the main opposition Congress party, saying it had deliberately hobbled parliament where the ruling BJP lacks a majority in the upper house.  

"It (Congress) seems to have a clear policy of hampering any government that isn't their own," Jaitley said.

Companies have long complained about India's unwieldy levies which they say deter investment and push up prices of locally made goods. The government says the GST, first proposed by Congress during its decade in power before 2014, would add two percentage points to economic growth.


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