New Delhi: Dubbing passage of the GST Constitution Amendment Bill as historic, Finance Minister Arun Jaitley Wednesday said manufacturing taxes and VAT will come down with the new national sales tax but the same for services tax will be decided by states and centre.
The Goods and Services Tax (GST), which will subsume over a dozen central and state levies including excise duty, service tax and VAT, is "perhaps the most important" tax reform, he said soon after Rajya Sabha overwhelmingly voted for the legislation.
"Today is a historic day for the reason that Rajya Sabha has passed the GST bill which have been held up for a very long time. All members present at the time of voting, voted in favour of the bill," Jaitley told reporters in Parliament House.
Thanking Congress and other opposition parties for supporting the legislation, he said proceedings in the Upper House demonstrated to the world that this is a great day for Indian democracy and Indian federalism.
"In fact Indian democracy and Indian federalism are at there very best in as much as all national political parties and regional parties, state governments have come together to usher a major taxation reform.. The government wanted to build a larger consensus, which we succeeded in doing," he said.
Asked if the implementation of the GST would mean rise in cost of air travel, mobile bills and eating out because of incidence of service tax going up in the new regime, he said that tax rate would be decided by the GST Council, comprising of the Centre and the states.
"Manufacturing taxes will certainly will come down, VAT will come down. What level services taxes are to be kept is a discretion of GST Council. It will depend on what states along with Centre will decide," he later told TimesNow.
On Congress demand for not converting the supporting GST legislation as Money Bill, Finance Minister said he has not pre-decided on bringing the Bills as Money or Finance Bills.
"Once the GST is implemented, it will bring basic changes as far as the Indian tax structure is concerned, it will converge India into one unified market, with one unified tax in the country, it will improve the base of taxation, it will make evasion extremely difficult.
"The central and state governments have to work together to make this a great success. Overall, I think we had an excellent debate," he told reporters.
He said although every state government is on board in order to implement one of the most important taxation reform in India, the fact is that it has been passed unanimously all regional and national parties have actively supported it.