A special session of the Assembly, which saw clashes between a few AAP MLAs and sacked minister Kapil Mishra, cleared the bill following an extensive discussion while also adopting a resolution on lowering tax slabs.
The Delhi Assembly on Wednesday passed the state Goods and Services Tax (GST) Bill even as Chief Minister Arvind Kejriwal pitched for capping the tax rate at a maximum of 10 per cent.
A special session of the Assembly, which saw clashes between a few AAP MLAs and sacked minister Kapil Mishra, cleared the bill following an extensive discussion while also adopting a resolution on lowering tax slabs.
Parliament had on April 6 passed four legislations to pave the way for nationwide roll-out of the GST from July 1.
As the Bill was passed, Kejriwal said under the GST regime, tax slabs should be 10 per cent, 5 per cent each for the Centre and the states, claiming that higher tax slabs may trigger inflation.
"GST is the biggest tax reform and in principle we all are with it. But we have concerns pertaining to its implementation. We believe higher tax slabs may trigger inflation and it will not be good for the country. The more the tax rate, the less the compliance. Lower tax slabs would lead to more tax collection. We brought down tax rate on many items in Delhi and reaped benefits," Kejriwal said.
Ahead of the session, Deputy Chief Minister Manish Sisodia had said that while the government will pass the Bill as it supports the intent behind the tax reform, it is concerned about the existing taxation structure and would oppose it in the GST Council. There is need for a 'less complex structure, lower taxes' for 'increased compliance', he had said on Tuesday.
The GST Council has approved four-tier tax slabs of 5, 12, 18 and 28 per cent plus an additional cess on demerit goods like luxury cars, aerated drinks and tobacco products.
"This House is in support of GST in principle but this House opposes the way in which tax rates of 18 and 28 per cent in GST Council meetings have been set," the resolution read. "This House proposes that GST tax rates or any Good and Service should not be more than 10 per cent… 5 per cent should belong to states and 5 per cent to the Centre."
Analysis
Items like cigarette, mobile calls, branded jewellery and luxury cars will cost the general public more.
Through a bid to cap the tax rate to 10 per cent, the AAP government is taking a step to make a connect with the people of Delhi.
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