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GST bill passed in RS but Congress’ fight for 18% tax rate far from over

The Congress wants to keep the NDA on a tight leash on the Goods and Services tax, even as it supported the constitution amendment bill on the GST on Wednesday in Rajya Sabha.

india Updated: Aug 04, 2016 09:51 IST
HT Correspondent
HT Correspondent
Hindustan Times
GST bill,Rajya Sabha,Congress
Congress MP P Chidambaram after the Goods and Services Tax (GST) bill was passed in the Rajya Sabha, at Parliament House in New Delhi.(PTI Photo)

The Congress may have supported a constitution amendment bill to roll out the goods and services tax in the Rajya Sabha but it wants to keep the NDA on a tight leash over the issue of capping the tax rate.

Former finance minister P Chidambaram announced the party will campaign across states for capping the new tax rate at 18% -- a move that takes the political tussle over from the negotiating tables to the public platform.

Congress deputy leader in Rajya Sabha Anand Sharma also indicated a prolonged campaign on the GST rate. “We will always maintain that the tax rate should not be high,” he said during the debate in the Rajya Sabha.

Chidambaram tried to garner support from regional parties for the key demand. “By capping the rate, we mean it should not be changed at the whim at the executive. Now, I ask you (MPs), do you want the tax rate to be changed by executives or the Parliament?”

In the Rajya Sabha, the government came under sharp attack from parties such as the AIADMK and the CPI(M). BJP ally Shiv Sena criticised some provisions of the bill as it would affect municipal bodies.

The Congress said it wants the GST regime but it repeatedly reminded the BJP about its hostile stance during the UPA era. “That time, it was political consideration and not on issues. Modiji led the protests. After 2014, things changed. CM Modi became PM.”

During the debate, the Congress used every opportunity to underline its role in the journey of the GST.

Read | GST bill passed in Rajya Sabha, unified market plan closer to reality

With Congress’ support crucial for the passage of the bill, Jaitley too, acknowledged the Opposition party’s role in preparing the GST bill.

“This is one of the most significant tax reforms in India’s recent history. It was first mooted in the budget speech of P Chidambaram. Discussion paper was released in 2009. A formal constitution amendment was introduced after the budget in 2011,” he said.

Chidambaram “welcomed” the government’s “friendly and conciliatory tone” but quipped that the “tone and approach changed only in the last 3 or 4 weeks”.

He mentioned how during the UPA rule, the bill could not be passed. “I did my chaar dham: meeting my PM, leader of Opposition of Lok Sabha, Rajya Sabha and the empowered committee of finance ministers. We tried to pass the GST bill with principal opposition party but failed. The government tried to pass it without the opposition party and I am glad it also failed,” he said.

The GST, the Congress leader said, also stands for “Good Sense Triumphs”.

The Congress leader clarified that the party had never opposed the concept of GST but wanted amendments in the NDA government’s draft bill. While the government moved nine amendments to address the Opposition’s concerns, the former minister added they were “pieces of clumsy drafting”.

Read | Industry hails passage of GST, advises cooperation with govt

Both Chidambaram and CPI(M)’s Sitaram Yechury questioned how the government could park the revenue outside the consolidated fund of India—as proposed in an amendment. The Congress and the Left demanded further tightening of the redressal mechanism and said a regressive tax like indirect tax should not be enforced at a high rate.

Samajwadi Party’s Naresh Agarwal wanted to know if the GST will affect food prices. He sought government’s assurance against price escalation. Trinamool Congress’ Derek o’ Brien slammed the Congress and the BJP for the delay. “When Virat Kohli was in school, we started talking about GST. For the sake of children, pass the GST bill early.”

Yechury batted for right of states, “Kerala government recently implemented a health tax on junk food. But they can’t do it anymore under the GST regime. Are we trying to reduce the states to come with a begging bowls to seek money for natural calamities? Ensure flexibility whereby concept of federalism is not destroyed,” he said.

AIADMK’s A Navneethakrishnan maintained that the GST bill violates right of TN assembly to impose levies: “The parliament has no jurisdiction to enact this law. This entire process will not withstand judicial scrutiny. Article 368 of Constitution is abused.”

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

First Published: Aug 04, 2016 09:46 IST