• Notification Date: 04-07-2023
• Notification No: N/A

Remembering Arun Jaitley on the Sixth Anniversary of GST

GST is acclaimed as the biggest taxation reform since independence. This has now been borne out of results achieved in the last 6 years of its implementation. The average growth rate of Gross GST revenue for the period 2018-19 to 2022-23 is 12.3% against the nominal GDP growth rate of 9.8%. 

Normally the tax buoyancy of indirect tax is 1, which means its growth rate coincides with that of Nominal GDP growth rate. To achieve a tax buoyancy of 1.25 in a new tax is the reason for celebration. The buoyancy of subsumed taxes in the five years of pre-GST period was only 0.72%. 
 

Apart from the difference GST made to the kitty of States and the Centre, GST has yielded huge benefit to our businesses in terms of removing artificial trade barriers and reducing logistic costs. Also by removing cascading of tax the overall incidence of tax burden on the consumers has come down. The digitised system of GST filing has stopped tax evasion in both GST and Income Tax. The phenomenal growth in individual income tax recently can be attributed to this. 

While the country is celebrating 6th anniversary of GST, I would like to remember the contribution made by Late Shri Arun Jaitley in implementing GST. As Revenue Secretary from Sept 2015 till November 2018, I was a direct witness of his leadership style which gave us a success. Of course the strong political will of Prime Minister Shri Narendra Modi played a major role in the role out of GST. I am now going to narrate the leadership style of Mr Jaitley that worked in this reform. 

Mr Jaitley had a winning personality. Very suave, very gentle, very generous, and very articulate. He had no enemies. I was floored by the amount of respect he commended from one and all, including from opposition parties. He would genuinely try to help anyone who came to him. I would describe him more as a saint than a politician. 

Mr Jaitley's knack of handling the multiple meetings of GST Councils played a major role in bringing consensus among states on all aspects of GST, including compensation structure, tax laws, tax structure and rates of individual items. Between September 2016 and July 2017, it was possible to achieve consensus in 18 GST Council meetings because of the leadership strategy of Mr Jaitley. 

I remember how Mr Jaitley would sit through long meetings of GST councils and patiently listen to all state ministers, including those of smaller states. At the end of a long debate on all contentious issues when decision is to be taken, Mr Jaitley would come out with a balanced proposal and all states would readily agree on it. If one state minister took a tough stand he would personally appeal to him and then go ahead with the consensus decision. 

Mr Jaitley had unlimited patience. He would also encourage the bothNDA states and opposition States to express their frank views in the GST Council meetings and allow them to defend their State's interest, and never imposing any decision on party line. In order to solve any contentious issue he would never have a strategy of calling up all NDA states in advance and asking them to unite on any one side. He was truly a democratic leader. 

Another major aspect of Mr Jaitley's leadership was that he was as generous with the bureaucracy as he was with other political leaders. He had full trust in my team. He had hardly any difference of opinion and would rarely defer from our proposals to the GST Council. 

He had a large heart of forgiving genuine mistakes of officers. He would never allow any member of GST council to target any officer in the meeting. This made him darling of all officers, and entire bureaucracy of State GST officials and CBIC supported him full heartedly in implementing GST. I remember how we would have 12 hours a day meeting of only officers thrashing out differences in our approach, before the discussion took place in the GST Council meetings.