GST Bill, 2014 : An Appeal to Political Leaders


The Presidents/General Secretary of


DMK, BSP, RJD and All other Political Parties



Dear Sir/Madam,

  GST Bill, 2014 : An Appeal to Political Leaders

          You are well aware that the Constitutional Amendment (Goods and Services Tax) Bill 2014 could not be passed in the last Session of the Rajya Sabha due to lack of consensus among Political Parties, although it has been pending before the Parliament since March 2011. The idea was first mooted by the government in their Budget 2006-07. It was then considered in-depth and revised by the experts at different levels, and also by a 21-Member Select Committee of Rajya Sabha. Its Report, tabled on 22 July 2015 in the Rajya Sabha, is also not unanimous.

          In this context, we would like to apprise you of the perception of industrialists and the business community, including our members, on this very crucial economic issue, for your kind consideration.

          It is felt that that implementation of GST will create a Common Market in India and significantly reduce the cascading effects of various taxes of the Union and State governments, now applicable to goods and services. GST will be a game-changer in terms of tax-structure, tax- incidence, tax-computation, credit utilisation and reporting. Besides, it will lead to a welcome re-structure and simplification of the present system of indirect taxes.

          Apart from simplifying the system of indirect taxes, GST will lower the cost of doing business and call for a basic re-design of the supply-chain which will lead to significant opportunities for improvement in long- term revenue and profit margins. The elimination of CST will provide an opportunity to optimise the supply-chains, enabling the companies to revise their existing procurement, distribution and ware-housing patterns with greater economy and efficiency. GST is also expected to result in a reduction in inventory costs.

          Experts have come to the view that at the revenue-neutral rate of 18 p.c., government cannot step up expenditure to stimulate economic growth. But, at a GST of around 20 p.c. or so, India’s tax-to-GDP ratio will go up by 1–2 p.c. and if the government spends the increased revenue of around $20-$40 billion on Capex, then GDP growth would be positively impacted, specially as the fiscal multiplier (2.4x for India) comes into play. This factor will also accelerate the progress of ‘Make-in-India’ campaign launched by the government, which is essential to push up the share of ‘manufacturing’ to 25 p.c. and stimulate the sagging exports. GST would also accelerate the inflow of FDI and FII into the economy, bringing in the much-needed funds to kick-start the held-up infrastructure projects involving a huge amount of investment.

          In view of all these benefits expected to image from the GST, we would earnestly appeal to you to lend your strong support and influence in getting the GST Bill passed in the next Session of the Parliament. We would also request you to kindly speak to your fellow leaders of other political parties, seek their consensus on this vital national issue and ensure that the said Bill is passed smoothly. In the event of any serious difficulties arising or any State’s finances getting adversely affected, after the operation of GST, then the Act might be suitably amended to ensure equality, fair deal and economic growth for all.

          We shall be grateful if you kindly give your serious consideration to our appeal and take the needed action in the interest of the nation and common people.

A line in response will be highly appreciated.

Thanking you,

Yours truly,


( Arun Kumar Saraf )