GST: govt keen on consensus, but to push ahead

The Centre on Wednesday said it would try to build consensus over the Bill on Goods and Services Tax in the Rajya Sabha but warned the Congress of a citizen backlash if the party blocked the key reform.

The Congress, the Left and the AIADMK had objected to certain points in a draft report cleared by a select panel of the Rajya Sabha on the Constitution Amendment Bill for Implementation of Goods and Services Tax, which the government wants cleared in the ongoing Monsoon Session. The report had dissent notes from the three parties.

“We are going to go ahead with the GST legislation,” said Finance Minister Arun Jaitley. “We will still try and build a consensus and explain the rationale and reasoning as far as the Congress is concerned.”

However, he was critical of the Congress’ stand. “It is hardly a dissent note on the Bill. It is a dissent against the Congress party’s own proposals. Congress MPs are giving a dissent against the suggestions made by their own Chief Ministers,” he said.

He said the proposed law was suggested in 2006 by the UPA government which introduced the Bill. The present Bill was drafted after discussions with everyone and Congress finance ministers in the past had made references on suggestions given by the earlier select committees, the Minister pointed out.

8-point dissent note The Congress, in its eight-point dissent note, had said the Bill is “pitted with compromises, exclusions and exceptions that make it impossible for us (the party) to extend our support to the Bill in the absence of the amendments we have proposed being incorporated.” It demanded that the GST rate be capped at 18 per cent so that “unfair burden” is not imposed on consumers, particularly the poor. It is also against allowing the States to impose an additional one per cent manufacturing tax.

Jaitley said the Congress has given its dissent note against the wishes of traders who are demanding the implementation of the GST, which is key to raising the country’s GDP. He went on to say that if the Congress opposes this Bill, then every citizen and trader will oppose the party.

The government is dependent on the Congress to get the Bill cleared as it does not have the numbers in the Rajya Sabha.

The Bill’s key provisions have been endorsed by the panel headed by BJP’s Bhupender Yadav. It suggested that the provision in the Bill that said the Centre “may” compensate States up to five years for any revenue loss be substituted by a commitment for compensation for five years.

Panel’s view In a clause relating to levy of one per cent additional tax by States, the panel suggested that the levy should be only on “all forms of supply made for a consideration”. The GST, which the government plans to roll out by April 1 next year, will subsume levies like excise and service tax.

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