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In a strong rebuttal to the principal Opposition Congress, Finance Minister Arun Jaitley rejected the conditions outright put by the former for supporting GST related Constitution Amendment Bill.
“I do not think it is prudent politics for any party to put pre-conditions, particularly on a matter which involves a fiscal relationship between the Centre and the States,” Jaitley said in a press conference here on Friday.
Senior Congress leader and former Finance Minister P Chidambaram had put three conditions including to constitutionally cap the GST rate at 18 per cent.
“All these three are unanimous decisions of the States to which even those ruled by the Congress are privy. So it is clear that these pre-conditions are an after-thought,” Jaitley said.
The government has indicated calling a special session to get the Bill passed so that the new indirect tax regime can be implemented from April 1 next year. Jaitley had already made clear that taking the Bill to winter session will make it extremely difficult to meet the GST deadline.
Jaitley said the first conditionality of a constitutional cap of 18 per cent on GST rate was not Chidambaram’s proposal in the Bill as approved by him after the Standing Committee recommendation in 2013. “Nor was it the then Finance Minister’s (Pranab Mukherjee) proposal, when he introduced the Bill in 2011 had any 18 per cent cap,” he said.
He said that the rates would be decided depending on the fiscal position and economic situation, the and Constitution need not be amended to alter them. As far as the dispute redressal authority is concerned, the Standing Committee had unanimously recommended that there is no need for it in the Bill, Jaitley said.
“All Congress party members were privy to that report. Chidambaram accepted that report in 2013, and then accepted the formula that disputes should be resolved in the GST Council which has one-third central voting power, two-thirds States with a three-fourths majority required for any decision,” he said while adding that both these two conditions are contrary to what Chidambaram’s stand was as Finance Minister.
Jaitley also said the third condition of up to 1 per cent additional tax for inter-State movement of goods, was a compromise between the Centre and the States, to which Congress party States were also privy.
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