Thursday, July 28th, 2016

Congress on board, GST Bill may come up in the Upper House next week

Narada Desk | July 28, 2016 5:38 pm Print
After prolonged discussions, the government succeeded in addressing the apprehensions expressed by the Congress and some state government on the GST Bill

After a lot of controversy and discussion, India moved a step closer to clear towards the biggest taxation reform in the country.

For the first time in eight years, there seems to be a consensus  among major parties contentious issues relating to the major tax reform.

The bill is expected to be tabled in the Upper House next week.

The government on Wednesday  decided to make key changes to pacify the Congress. The cabinet approved two key changes to the Bill that seeks to  address the concern of Congress and some state governments

A senior Congress leader on Thursday said that talks over GST are going in the right direction, that indicates a postive response from the Congress, which has so far blocked the bill, cleared by the Lok Sabha last year.

Meanwhile, CPI(M) General Secretary Sitaram Yechury  reiterated that the BJP-led central government was shying away from convening an all-party meeting on the GST Bill.

“Why is government not calling an all-party meeting on the GST Bill,” Yechury asked during a press conference.

CPI(M) has been accusing the government of trying to resolve the impasse by dealing with only the Congress party. Yechury earlier said this is not bilateral issue between the BJP and the Congress.

He said that calling an all-party meeting on contentious bills has been a tradition which the Bharatiya BJP-led Union government was deviating from.

“What are the real intention of this government vis-a-vis the GST Bill?” asked Yechury.

Jaitley is expected to meet leaders of Left parties Biju Janata Dal (BJD) and the Samajwadi Party.

The Wednesday meeting, chaired by prime minister Narendra Modi,  had decided to do away with the additional 1 percent tax levy by the producing states and introduced a guarantee of 100 per cent compensation to States for five years to make good any revenue loss incurred by them due to the introduction of the Goods and Services Tax .

The centre has also agreed to give states more power to the  independent body that would resolve disputes over revenue sharing once GST came into force.

The decision was  taken after a  meeting of the Empowered Committee of state Finance Ministers with finance minister Arun Jaitley on Tuesday.

Arun Jailtley also held  a  meeting with Congress deputy leader in Rajya Sabha Anand Sharma  and offered a draft of the changes to the to the Constitutional amendment bill to senior Congress leaders.

For the tax reform to become a reality, the government needs  the support of two-thirds members in the Rajya Sabha to pass a constitutional enabling amendment.   It also need the support of the majority of states to effect changes in the constitution.

With 60 members, the Congress has the maximum seats in the 243-member Rajya Sabha.

Regional parties such as BJD, the Trinamool Congress, JD(U) are backing the bill. Tamil Nadu government has earlier expressed reservations against some provisions in the GST bill. AIADMK has 13 Rajya Sabha members. According to reports, the government is hoping that the party will walk out during a vote, which will help in reducing the number of votes needed for the bill to go through.

A single taxation system across the country  was first proposed by the last UPA government but it was blocked by the then opposition including the BJP. When NDA governement came to power in Delhi they introduced the Bill with minor changes and they managed to pass it in the LoK Sabha in 2014.

When the Bill came to the Upper House, the Congress opposed the Bill. They demanded that a cap be fixed on the tax that can be levied under the GST and include this in the Constitution Amendment Bill.

With the government and the Congress sticking to their stands, the impasse around the bill continued for more than one year.

Loading...