With just about a week to go for the Monsoon Session of Parliament, there are no signs of any rapprochement between the two political majors — the ruling BJP and the Opposition Congress — on the crucial Constitution (122nd Amendment) Bill, 2014, which will enable the country adopt the Goods and Services Tax regime.

While both parties agree that India needs the GST, they have been squabbling on the capping of rates. The Congress wants the rates ring-fenced in the Bill, while the BJP and the States hold the view that the rates cannot be part of the Constitution Amendment Bill but can be incorporated in the subsequent GST law.

Key issues “The Congress is in favour of GST, but we have raised eight issues out of which three are of critical importance — Constitutional cap or ring-fencing of the GST rate at 18 per cent, withdrawal of the 1 per cent tax on manufacturing, and providing for an independent dispute redress mechanism. There is no change in our stance. No one from the BJP has approached us,” said Randeep Singh Surjewala, national spokesperson for the Congress.

Once the Constitution Amendment Bill is passed, the Centre and the States will have to come out with their own GST laws that would actually implement this indirect tax regime.

The BJP, which is also wooing regional parties to get the numbers to pull the Bill through the Rajya Sabha, says it is willing to be flexible on all issues except the capping of rates.

“We can word the subsequent GST law in such a way that it gives flexibility on rates, but we cannot keep amending the Constitution every time there is a need to bring in any change.

“The Indian tax legislation does not prescribe specific rates but only the nature and basis for taxes. If the Congress has any suggestions/mechanism for the same, we are open to discussions,” said PN Vijay, national spokesperson of the BJP.

Required numbers Asked if the government can get the Bill through the Rajya Sabha without the Congress support, Surjewala told BusinessLine : “there are two ways of looking at it. First, GST is an important legislation and ideally a consensus should be built around it of all political parties. We had tried to do so.

“Second, though the BJP has been publically speaking of wanting to build a consensus, their obstinacy and arrogance have prevented them from being bipartisan.”

The BJP requires the support of 154 Elders in the 245-member Rajya Sabha to get the Constitution Amendment Bill passed.

At present, it has 54 members, while the NDA in total has about 72. If the BJP is able to get on board regional parties, including the AIADMK, the DMK, the SP, the BSP, the RJD, the CPI(M) and the Biju Janata Dal besides at least five of the independent and five nominated members, it would have some 170 votes — enough to get the Bill through comfortably.

“I will certainly try my best to mobilise. I am meeting leaders of various political parties. Even with the Congress, I will continue the dialogue. Either the Congress supports it or they allow a vote on it,” Finance Minister Arun Jaitley had recently told BusinessLine .

Meanwhile, the Empowered Committee of State Finance Ministers is expected to meet on July 15 to try and finalise the modalities of the tax rate and iron out niggling differences between States.

“The Chief Economic Advisor to the Finance Ministry, Arvind Subramanian, is likely to make a presentation on the revenue neutral rates (the rate at which there will be no profit or loss to a State) at this meeting. States are looking at a 20 per cent rate,” said a member of the Committee.

While the Chief Economic Advisor has proposed a revenue neutral rate of 15-15.5 per cent, the National Institute of Public Finance and Policy has suggested 27 per cent.

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