Back-channel talks on; Jaya unlikely to come around on GST Bill

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Although the Samajwadi Party (SP), Trinamool Congress (TMC) and Biju Janata Dal (BJD) have indicated they will support the government on the Goods and Services Tax (GST) legislation, it is unlikely that the All India Anna Dravida Munnetra Kazhagam (AIADMK) will change its mind and support it.

The government has indicated it will do everything possible to have the bill passed in the monsoon session, failing which it will miss the rollout target of April 2016. However, not only will the opposition prevent a discussion on the bills but Congress-ruled states will not pass it.

So far, without too much effort, and little outreach to its allies, the Congress has managed to stall the bill at every stage. The bill did pass the Lok Sabha earlier this year but that is where it is stuck since.

Unlike the AIADMK, the Congress’ opposition is not ideological. It is opposed to the bill as a protest against the ruling Bharatiya Janata Party’s “high-handedness”, and refusal to respect the Congress as an “equal”. “Objections to the bill are an afterthought. We are stakeholders. We should be treated as such”, said a Congress leader.

In the circumstances, it is hard to see how the bill will become law in the time-frame visualised by the government.

Prime Minister Narendra Modi is in touch with West Bengal chief minister Mamata Banerjee, Odisha CM Naveen Patnaik, Karnataka CM Siddaramaiah and Tamil Nadu CM J Jayalalithaa to ensure the Bill is passed Rajya Sabha.

Some back-channel efforts are also on. A top leader is likely to fly from Delhi to Chennai to meet Jayalalithaa to discuss the issue. However, the possibility of bringing Tamil Nadu around seems remote.

The Naveen Patnaik-led BJD maintained it is not opposed to the Bill. The regional party, which has seven MPs in the Rajya Sabha, has proposed only one amendment, that would allow levy of one per cent additional cess by all mineral bearing states.

“We have demanded that all mineral-bearing states be empowered to levy one per cent extra cess for the next two years. This would be in the interest of all such states. The BJD is okay with the overall GST structure and all other provisions in the Bill. In fact, our party is backing the introduction of GST”, said Bhartruhari Mahtab, BJD leader in the Lok Sabha.

Due to the application of destination principle in GST, the mineral producing states where the pollution is localized do not get any part of the revenue. It is only the consuming state that gets the tax revenue whereas due to pollution, the citizens of the producing state suffer. Hence, Odisha has been demanding one per cent cess.

Source : Business Standard

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