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Congress MP Shashi Tharoor says that while there would be no problem in passing the Budget, the party would not pass the GST Bill unless the Centre agrees to its three suggestions.
“They (the BJP-led government) really need to accept our minimum suggestions,” he said on Sunday, on the sidelines of the ‘Lit for Life’ literary festival, organised here by The Hindu . The idea of a GST, Tharoor pointed out, was to create one national market. “I used to joke to my European friends that they have 29 sovereign countries but one common market but we have one sovereign country and 29 markets,” he said.
Noting that when the BJP was in the opposition, it obstructed the GST for eight years, Tharoor said that after the party came to power “in what is naked political pandering to their constituencies” it created a “completely artificial category of producing states”. Once you divide the country between producing and consuming states, the single market is gone, he said. Besides, for a state to know if its goods were leaving its borders, it would have to bring back checkpoints — the very idea of GST is to avoid that, he said.
‘Recipe for evasion’ Secondly, he noted that the National Institute of Public Finance and Policy, a Delhi-based think-tank, had worked out that the GST in its present form would mean a tax rate of 27 per cent. “Twenty-seven percent tax is a recipe for evasion,” Tharoor said. Nowhere in the world is a GST (or VAT) more than 13-16 per cent. Congress therefore, he said, wanted a cap of 18 per cent but the government came up with a “specious argument” that numbers could not be written into the Constitution. “Please read the Constitution. In some cases, even amounts are mentioned,” he said.
Finally, Tharoor said the Congress wanted a dispute settlement mechanism, for otherwise, the parties to a dispute — state finance ministers and the Central government — would end up adjudicating on the dispute.
“We had eight points of objection, but we dropped many in the interests of conciliation,” he said. The Congress party also does not like items such as alcohol, tobacco, electricity and communications dropped from the purview of the tax but did not insist. However, on the three major objections, there would be no compromise. “If they agree, we will pass the Bill immediately,” Tharoor said.
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