The Goods and Services Tax (GST) Bill was passed on 16th August, 2016 in a one-day special session of the Bihar legislature, while 3 MLAs of Communist Party of India-Marxist and Leninist (CPI-ML) boycotted the bill and staged a walkout from the House. Participating in the debate, legislators of both ruling and Opposition parties underlined the benefits of the bill for the state.
With the GST Bill passed in the House, Bihar became the second state after Assam to adopt it, while neighbouring Jharkhand is scheduled to convene a special session of the state assembly to ratify the bill on Wednesday. The GST Bill, dubbed India’s biggest tax reform, needs to be ratified by at least 15 state legislatures out of a total 29 before the President can notify the GST Council, which would eventually decide the new tax rate and other issues. The Central Government has set a deadline of April 2017 for its rollout.
While speaking on the merits of the GST bill for consumer states like Bihar, chief minister Nitish Kumar said that his party was in favour of the bill from the beginning as “it would simplify the tax system to help the common people and the state as well”. Mr. Kumar also said that his party’s support helped Prime Minister Narendra Modi win the support of even Opposition parties like the Congress, which, for many years, had stalled the reform. Bihar is likely to get additional revenue of about Rs. 8,000 crore, depending on the rate to be fixed once the GST bill becomes law.
The Bihar chief further said that he had backed the Central Government on insisting that an upper limit for GST should not be laid out in the Constitution because it would then require amending the Constitution each time the rate was to be revised. “After much negotiation, the Congress came around to that point of view,” he added. He also said that the Centre must share tax-collecting powers with the states and ensure that the new, complicated IT systems and software to compute and process the tax are made available to state officers.
Senior state BJP leader, Nand Kishore Yadav, and leader of Opposition Prem Kumar, thanked chief minister Nitish Kumar and the ‘grand alliance’ government of Bihar for supporting the GST Bill through “which Bihar will be benefited a lot”. Senior Congress leader and party MLA Sadanand Singh too thanked the NDA government at the Centre for “getting the GST bill passed”. “This GST bill was first brought by the UPA government but the BJP had not supported it then…however, Bihar today became the first non-NDA state to ratify the bill,” said Mr. Singh. RJD leaders too supported the bill saying “it would boost the economy of the state”.