A Rajya Sabha panel on Wednesday endorsed a majority of the provisions of the Goods and Services Tax (GST) Bill but independent India's biggest tax reform may still run into rough weather in Parliament following a string of dissent notes from the Congress, AIADMK and Left parties.
Finance Minister Arun Jaitley said the government would go ahead with the "revolutionary" GST legislation that would make India a unified market with a single tax by building a consensus, urging the Congress to reconsider its "irresponsible" opposition.
The new system, when implemented, will dramatically alter the country's tax administration by replacing a string of central and local levies such as excise, value-added tax and octroi with a single tax.
The panel's backing raised hopes that a modified version of the reform measure could be pushed through but the ruling NDA does not have adequate numbers in the Rajya Sabha to get the bill passed on its own. The panel recommended moderate rates and favoured compensating states for five years to offset potential revenue loss after the GST roll-out to ease concerns over some of the contentious provisions of the bill.
On the taxation of petroleum products, the panel endorsed the provisions of the GST Constitution Amendment Bill under which a decision on taxation would be taken by the GST Council.
The report of the Rajya Sabha panel had three dissent notes by the Congress, the AIADMK and Left Parties. In its dissent note, the Congress said the bill "is pitted with compromises, exclusions and exceptions that make it impossible for us to extend our support".
The Constitution Amendment Bill to roll out GST was passed in the Lok Sabha in May, but was referred to the Rajya Sabha select committee on Opposition demand.
"I hope that the Congress party will reconsider its irresponsible decision," Jaitley said, noting that he had never seen a political party opposing its own legislation and giving a dissent note against suggestions by its own chief ministers.