BackIn sustained push, NDA again reaches out to parties on GST bill
The Left says states will lose right to raise revenue, seeks resolution outside bill, even as Congress keeps the government guessing
Premium
New Delhi: The government on Thursday reached out to opposition parties over the passage of the goods and services tax (GST) law, a day after accepting some of their demands for changes in the legislation.
While the Congress party has kept the government guessing, the Left parties on Thursday repeated one of the original complaints about the law—that it would take away the powers of state governments to levy taxes.
The central government is keen that a consensus emerges on the bill and that it gets tabled and passed in the ongoing monsoon session of Parliament, which is scheduled to end on 12 August.
On Thursday, senior ministers of the ruling National Democratic Alliance (NDA) met opposition leaders—including those from the Congress, the Left parties and prominent regional parties—over the passage of the constitutional amendment bill that will start the roll-out of the GST, which will subsume a range of levies.
The tax is aimed at dismantling inter-state barriers to trade in goods and services and creating a common market. Some economists say GST could boost gross domestic product by as much as 2 percentage points. The bill has already been passed by the Lok Sabha.
On Wednesday, the Union cabinet accepted some of the recommendations given by a Rajya Sabha select committee, including doing away with the contentious 1% additional levy on supply of goods, one of the Congress party’s three demands, and proposing full compensation to states for five years for any revenue loss arising from the transition to GST.
However, the government did not concede to two of the Congress’s key demands: to cap the GST rate at 18% and to include a provision for a dispute resolution panel in the bill. Both these demands are strongly opposed by the state governments, and finance minister Arun Jaitley has said that making these changes is neither feasible nor practical.
Most parties other than the Congress and the Left have already assured the government of their support for the GST bill. The Congress, with 60 MPs in the Rajya Sabha, and the Left parties, with nine MPs, have issues with the bill.
Leaders of the NDA said the government met representatives of the Congress, the Communist Party of India (Marxist), or CPM, the Communist Party of India, the Trinamool Congress, the Janata Dal (United), the Biju Janata Dal and the Samajwadi Party.
The National Democratic Alliance (NDA) is in a minority in the Rajya Sabha with just 72 MPs. It will need the support of at least 163 members in the 245-seat House to pass the constitutional amendment bill. While the math has slowly become more favourable for the NDA, there’s still a small gap that needs to be bridged.
On Thursday, Sitaram Yechury, general secretary of the CPM, said states “will be deprived of their only right to raise revenue as this right will be abolished with the bill".
He wanted a “resolution" for this “outside the bill" and said the government “has to come out with an assurance".
On Thursday, Jaitley also met Ghulam Nabi Azad, leader of the opposition in the Rajya Sabha, former finance minister P. Chidambaram and Anand Sharma, deputy leader of the Congress in the Rajya Sabha.
“The decision taken by the Union cabinet is a positive one, and we feel things are moving in the right direction now. We are hopeful that discussions will continue and the government will agree to our demands," a senior Congress leader said on condition of anonymity.
The passage of the GST bill in the ongoing monsoon session will be crucial for the government to meet the 1 April 2017 deadline for the roll-out of the tax, which aims to unify the country into a single market by removing inter-state barriers to trade in goods and services.
“I think there is great motivation for opposition parties to support the bill. With states coming on board and certain modifications by the government, there is a good chance that the GST will be passed this session," said A.K. Verma, political science professor at Christ Church College, Kanpur.
PTI and Meenal Thakur of Mint contributed to this story.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
