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Can the Congress claim credit for passage of the GST bill?

In 2011, when the Congress-led UPA government introduced the Goods and Services Tax (GST) bill in the Lok Sabha, it set the deadline of April 2012 for the rollout of the new indirect tax regime.

india Updated: Aug 03, 2016 11:40 IST
Saubhadra Chatterji
For the last two years, Congress had been consistent in demanding three major changes in the GST bill.
For the last two years, Congress had been consistent in demanding three major changes in the GST bill.(Sushil Kumar/HT File Photo)

In 2011, when the Congress-led UPA government introduced the Goods and Services Tax (GST) bill in the Lok Sabha, it set the deadline of April 2012 for the rollout of the new indirect tax regime.

Two Bharatiya Janata Party (BJP)-ruled states, Madhya Pradesh and Gujarat, red flagged the reform legislation that aims to stitch together a common market by dismantling fiscal barriers between states. It is a single national uniform tax levied across the country on all goods and services.

In the last two years, as the GST negotiations between the NDA and the opposition reached its peak, the Congress never forgot to mention at every possible place how Prime Minister Narendra Modi, then chief minister of Gujarat, had blocked the bill on the political ground.

With the GST bill set to pass the Rajya Sabha hurdles on Wednesday, the claims and counter-claims of who should get the credit for India’s biggest tax reform are bound to echo in the political arena.

Read | GST bill almost a reality, to be tabled in Rajya Sabha today

The BJP has an advantage, being in power and steering the long-pending legislation to its conclusion. But the history of the Indian GST can’t be complete without the contribution of the Congress.

It’s a common knowledge that since 2011, the Congress-led UPA government has pushed the bill for three years till it lost power at the Centre.

The Congress party also formed an empowered committee of state finance ministers, headed by West Bengal’s Ashim Dasgupta to hammer out the differences between the states. A task that ultimately went to Trinamool Congress’ Amit Mitra.

For the last two years, Congress had been consistent in demanding three major changes in the GST bill. It batted for a tax rate capped at 18%, taking a pro-people stand so that consumers don’t bleed under the new tax regime.

Read | How behind-the-scenes managers helped pave the way for GST deal

The principal opposition party has forced the government to accept its two demands: To scrap the 1% entry tax that was aimed to benefit three states and giving more teeth to the grievance redressal mechanism.

Although the government didn’t agree to the Congress’ third demand—to cap the tax rate in the 122nd constitution amendment bill—it has agreed to do so in the GST bill that will come in the winter session of Parliament.

“We wanted a pro-people ‘Good and Smart’ tax bill. We wanted the bill to help both the corporate and the consumers,” senior Congress leader Jairam Ramesh said.

Union information and broadcasting minister Venkaiah Naidu maintained that the government wanted to take the Congress along. “Although we had numbers. We were sure that we want the Congress support for the bill,” Naidu told Hindustan Times, indicating further the importance of the Congress party in the passage of this historic bill.

Now, it will all depend on the Congress’ propaganda machinery how far they can publicise the party’s role and credit in the passage of the GST. And it won’t be an easy task against the BJP.

Read | Here is why GST may increase your phone bill but reduce eating out costs