Finance minister P Chidambaram on Wednesday hoped that parliament would by the end of this year approve the constitutional amendment needed to introduce the goods and services tax (GST) regime. Addressing a business event organised jointly by Bank of America Merrill Lynch and DBS here, Chidambaram said the government planned to introduce the GST bill during the winter session of parliament and was hopeful it would be passed in December.
The proposed tax legislation seeks to replace all indirect taxes levied on goods and services by the central and the state government by a uniform tax.
He said changes in the legislation would be made after reaching a consensus with state governments.
The Indian finance minister, who is on a four-nation tour to woo foreign investors, said the GST was a major reform and it would boost the country’s economic growth.
According to a note issued by Bank of America Merrill Lynch after the event, Chidambaram said the biggest threat to India’s economic reform would be unstable government post 2014 general election.
Addressing an investors’ meeting in Hong Kong Tuesday, Chidambaram had promised a stable tax regime and push for more economic reforms to attract overseas investment.
Welcoming the finance minister’s assurances, Naina Lal Kidwai, president, Federation of Indian Chambers of Commerce and Industry (FICCI), said the GST would help plug loopholes in the indirect tax system and other measures would help boost investors’ confidence.