Who set the ball rolling on GST? Vajpayee, not Congress, says Arun Jaitley

Vajpayee govt setup a task force in 2003, submitted a report saying merger of central, state levies

Finance Minister Arun Jaitley today said the first move towards the landmark GST was made by the Atal Bihari Vajpayee government 17 years back, and not the Congress.

The Vajpayee government constituted a task force which in 2003 submitted a report saying central and state levies should be merged or unified into a Goods and Services Tax (GST), he said at a public rally on the new tax regime.

Jaitley said the government changed in 2004 and the incoming Congress saw merit in the argument mooted in the report.

The then Finance Minister P Chidambaram in 2006 spoke of GST and set 2010 as deadline for rolling out the new indirect tax regime, he said, adding he could not implement the plan.

In 2011, the then Finance Minister Pranab Mukherjee, who is now the President, introduced a Constitutional Amendment to bring GST.

But the UPA could not get all states onboard because they could not resolve how to compensate losses to manufacturing states arising because of GST being a destination-based tax, he said.

Prime Minister Narendra Modi, he said, was clear from day one that India has to be unified economically and devised not just a compensation formula, which was put in the Constitution Amendment Bill, but also got all the 29 states and six union territories on board to agree to the new tax.

India has 29 states and seven union territories but the Finance Minister apparently did not include Chandigarh as that Union Territory has not be consulted separately because it is part of Punjab and Haryana in such negotiations.

Jaitley said Prime Minister Modi not just got the bill approved in the Parliament but also got states and UTs to pass their laws, with Jammu and Kashmir assembly being the last to pass a resolution yesterday adopting GST.

Taking a dig at the Congress, he said the GST was in the party's election manifestos but at the last moment it did flip-flops as it was not sure if the new tax regime would pay off.

They felt if GST clicks they will say they were part of the process that led to the new regime and if it failed the government could be blamed, he said.

GST, he said, has integrated the nation as an economic entity by replacing over a dozen state and central levies with just one tax and one rate.

The new tax regime will go a long way in benefit the economy and businesses, he added.