Chief Minister Smt. Vasundhara Raje has said that the Goods and Services Tax (GST) is in the interest of all states including Rajasthan and the country. She said that implementation of the GST regime would boost development and increase investment along with opportunities for employment. Smt. Raje was intervening in a debate in the State Assembly on the motion for ratification of the 122nd Constitutional Amendment Bill. The Chief Minister said that this Assembly session would be remembered for this ratification motion for the 122nd Constitutional Amendment Bill to setup GST regime in the country. She said that after the GST system was established, along with the Centre, the states would also get share in the taxes collected on services.

Similarly, the sales tax on retail trading of goods would be shared by the Centre along with the states, she said. Smt. Raje said that in the new regime, rates of indirect taxes and tax structure of the entire country would be unified. This would give stability to the tax system and trading would become easy. Reduction in transaction cost in trading would lead to increased competitiveness of Indian goods and services in the international market and country’s exports would get a boost. As a result, goods prices would fall and common man would get a relief from inflation, she said.

The CM said that Rajasthan, mostly being a consumer state and the GST being a destination tax, would definitely gain out of the GST system. She said that VAT system implemented as a tax reforms exercise in 2006 and GST was the next step in this direction. She said that setting up a new system demanded advance planning. While introducing VAT, several committees were formed to make proper arrangement for its implementation, she said adding that these committees redressed the grievances of the industry and the business sectors. Smt. Raje said that in view of that experience, planning for implementation of GST system in the state started long back. State-level GST Advisory Committee was set-up in chairmanship of Urban Housing Development Minister, State Empowered Committee in the chairmanship of Principal Secretary Finance and Operations Committee on GST in the chairmanship of Commissioner Commercial Taxes. She said that in this regard, district-level GST committee would be set-up for redressal of issues in the districts.

Smt. Raje told that the GST Council would give important recommendations to the State and the Central governments on GST. While fixing tax rates, the Council would ensure that the revenue collections of states were maintained at the present level, as well as the general consumers were not charged a very high tax, she added. She said that all doubts regarding loss of revenue to the state had been well addressed in this Constitutional Amendment Bill. After its implementation, for next five years, all revenue losses to the state would be compensated by the central government. Doubts of revenue loss were raised while implementing VAT as well, but these proved baseless, she added.

Smt. Raje said that all the states and the central government were participating in the process of decision making to implement GST system. The Centre and the states were jointly adopting to a new tax regime to bring uniformity in different consumer markets all across the country, she said. She further added that it was an excellent example of Cooperative Federalism. The CM said that the GST system would not only be an important step towards tax reforms in the country, but would also prove to be an unprecedented show of warm relations between the centre and the states.

Jaipur, 2nd September 2016