The government proposes to roll out the GST, a new indirect tax regime which will subsume various levies including sales tax, excise, service tax, from April 1, 2016.
GST can lead to 2 per cent increase in GDP or gross domestic product, Mr Jaitley said after introducing the bill in the lower house of Parliament. Analysts back the Finance Minister on this claim.
Once the Constitution Amendment Bill is approved by Parliament by a two-third majority, it will have to be ratified by half of the states.
The Bill on GST was introduced in the Lok Sabha in December last.
The GST will cut down the large number of taxes imposed by the central government and states and will lead to the creation of a unified market, which would facilitate seamless movement of goods across states and reduce the transaction cost of businesses.
A single rate GST will replace central excise, state VAT (value added tax), entertainment tax, octroi, entry tax, luxury tax and purchase tax on goods and services to ensure seamless transfer and end of "inspector raj" as well as "tax on tax," Mr Jaitley had earlier said.
(With agency inputs)