With headway easing the stuck Goods and Services Tax (GST) Bill to be tabled in Rajya Sabha next week, Congress party is also hoping to persuade Modi government on capping the GST rate at 18 per cent as well as creating an independent mechanism for resolution of disputes.
18 percent cap on the GST, deletion of the provision of 1 per cent additional tax and an independent mechanism to resolve disputes and disagreements between the state and the Centre and within the states — were the three sticking points over which the principal opposition party had thus far blocked the GST Bill in Rajya Sabha, where it is numerically superior to the government.
“We hope to persuade the government in national interest and in the interest of people to agree to these two issues,” party’s chief spokesman Randeep Surjewala told the press.
Arguing for the capping, the Congress contended that imposing the burden of high rate taxation on people, may even dis-incentivize them from paying their taxes leading to creation of parallel black money.
“With income tax slabs already between 30 per cent and 40 per cent, is it not reasonable and proper on part of Congress to say that let us put an outer limit of 18 per cent beyond which you can’t go…”, he asked reacting to the reports of government seeking a higher cap.
Telling that his party has given certain suggestions to make GST “meaningful, practical and acceptable to the people”, the Congress spokesperson also took a dig at the BJP for opposing the legislation during the Congress-led UPA government years.
“GST is an instrument of growth that Congress conceived and introduced something that was blocked by Modi ji, Jaitley and Sushma ji and entire BJP for nearly 6 years,” he said adding that the entire endeavour of the Congress is to ensure that the GST as passed by Parliament is not only consensus based but reflected the will of this country.
This week saw a big positive headway on the stuck constitutional amendment bill, described by the incumbent BJP-led NDA government as the most significant economic reform in indirect taxes since independence.
The bill is finally slated to be listed for consideration and passage in Rajya Sabha next week, after Centre reached out to the leaders of several opposition parties, including Congress, Left, JD (U) and the SP.
Holding hectic parleys, Union Finance minister Arun Jaitley and Chief Economic Advisor Arvind Subramanian met with Leader of Opposition in the Rajya Sabha Ghulam Nabi Azad, deputy leader Anand Sharma and former Finance Minister P Chidambaram. Besides, he also met with senior Samajwadi party leader Ram Gopal Yadav and CPI (M) general secretary Sitaram Yechury.
The government is also in touch with AIADMK chief and Tamil Nadu Chief Minister J Jayalalitha on the key bill.
Even Prime Minister Narendra Modi had held informal chat with some members of the Opposition parties on Thursday when Rajya Sabha was adjourned briefly during the Question Hour.
The bill got a sense of headway late on Wednesday after the Union Cabinet approved changes in the legislation. It cleared the dropping of 1 per cent manufacturing tax as well as providing guarantee to compensate states for any revenue loss in the first five years of rollout of the proposed indirect tax regime across the country.
On other contentious issue of capping the GST rate, the centre is said to have built a broad consensus with the states that the rate should not be mentioned in the Constitution and instead could figure in GST law.
(With inputs from the Agencies)