Cong ‘engaged’, GST Bill in RS likely next week

Aditi Tandon

Tribune News Service

New Delhi, July 29

In a positive development on the Goods and Services Tax Bill front, the Government today said the long-pending tax reform legislation would be taken up by the Rajya Sabha next week.

The announcement by MoS for Parliamentary Affairs Mukhtar Abbas Naqvi came on a day when the Congress’ parliamentary group on legislations met informally to discuss the Cabinet’s forward movement on the Bill. The panel, headed by former Finance Minister P Chidambaram and comprising among others former food minister KV Thomas, took a positive note of recent Cabinet decisions to remove two major hurdles in the way of the Bill’s passage.

These are: Cabinet decisions to do away with 1 per cent additional levy earlier allowed to manufacturing states over and above the GST rate and agreement to provide 100 per cent compensation to states for any revenue losses that might incur on account of the implementation of the law for the period of first five years.

Yesterday, Leader of Opposition in the Rajya Sabha Ghulam Nabi Azad, his deputy Anand Sharma and Chidambaram had two rounds of formal discussions with Finance Minister Arun Jaitley and Chief Economic Adviser Arvind Subramanyam.

“The discussions were constructive and positive,” said Sharma after the meeting, with sources indicating that the matter is now stuck at the draft of the law in respect of 18 per cent cap which the Government has agreed to provide as part of the statute, but not the Act.

The Chidambaram-led panel today discussed these issues and decided to meet again on Monday when Congress president Sonia Gandhi is expected to consider the GST discussions and take a final decision. The panel today agreed that there was requirement of a few more clarifications from the Government and the same would be sought. Even officially, the Congress said, “We are happy the Government has seen reason in our demands and has expressed a willingness to negotiate.”

The Government yesterday spoke to leaders of Congress, SP, JDU, and CPM to fast track discussions on the Bill with Jaitley reiterating the Government wanted to bring the Bill through consensus.

18% clause still a hitch

What still concerns the Congress is the mechanism being adopted to ring fence the GST rate at 18 per cent for a specified period. “You have to ring fence the GST rate to prevent the states from raising it arbitrarily and putting the burden on consumers,” Deputy Leader of Congress in Rajya Sabha Anand Sharma said, indicating a climb-down from Congress’ previous position of GST rate cap provision in the Constitutional Amendment Bill itself.