BJP’s GST Bill destroys single market: Tharoor

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As the winter session of Parliament wound up without the crucial Goods and Services Tax (GST) Bill being passed, Congress leader Shashi Tharoor said that the Bill could have been passed in the session if the ruling Bharatiya Janata Party (BJP) had not “mulishly” insisted on resisting the Congress party’s three key proposals.

Tharoor maintained that there was a “perception” in the Congress party that “there is a sort of desire (in the BJP) to target United Progressive Alliance (UPA) leaders for matters that have nothing to do with politics,” like the National Herald case. This, he said, had contributed to the “growing estrangement” between the BJP and the Congress, and the BJP needed to heal the rift in order to rule.

The MP from Thiruvananthapuram said if the BJP had “the sense” to formulate something closer to the UPA’s original GST Bill, then it could have been passed in Parliament quickly.

“I honestly believe the Bill could have been passed in this session if the BJP had not mulishly insisted on resisting our proposals,” Tharoor said in an exclusive interview to the thestatesman.com.

He also said the Congress party had made a “huge compromise” to reduce its earlier minimum list of eight objections to three core objections.  “We stand by those (eight) objections. But in a spirit of compromise we came down to three essential ones,” he added.

“It has been an absolute disaster that 70 years after Independence we don’t have one single unified tax regime. The Congress or UPA GST Bill supported that and proposed it,” he said, adding that it was “strongly opposed by the BJP, especially Narendra Modi”.

Tharoor said that in the BJP version of the Bill “they have destroyed the idea of a single market, by talking of producer states having the right to levy an extra one per cent”.

“Now if you start dividing the country into producer states and consumer states you are destroying the single market, and on top of that you talk about exporting goods from producer state to another state,” he said, adding, “I say we should never vote for a GST Bill with such a provision.”

The second objection is about the way in which the Bill is not comprehensive and comes up with various numbers which, according to the National Institute for Finance Policy, could amount in some cases to 27 per cent.

Tharoor said that 27 per cent tax could be recreating the grounds for tax evasion, and black money would go up.  “We said, if you really need the revenue, let us have a cap of 18 per cent. They are saying we can’t have a cap as we can’t have a cap in the Constitution. That is simply not true… because there is such a precedent. We are not suggesting an amount, but a percentage. What is the harm in that?” he added.

“Instead of being a comprehensive bill like ours, they’ve left out a number of goods and services, which in our version of the Bill were included. Our worry is if you create a tax which is difficult for people to comply with you will actually be promoting conditions for tax evasion,” Tharoor said.

The third condition was “there has to be a fair disputes reconciliation mechanism.” “What we are saying is have an independent body. We’ve suggested a formula, we could be open to discussing the formula,” he said.

“If the BJP had accepted these conditions two months ago we would have had a Bill this session. If they accept the conditions within the next two months, we will have a bill in the next session,” he added.

Tharoor maintained that independent rating agencies stated the UPA’s bill could add one to two per cent to the GDP. But with regard to the BJP’s bill, “the experts said that in this form it will not even add 0.1 per cent to the GDP”.

“So it’s a pointless Bill, we may as well not have it. Even advocates of GST urged people to block it, saying no bill is better than a bad bill. Because GST will get discredited if you have a bad bill,” Tharoor said.

When asked if the Congress objection to the GST was linked in any way to the National Herald case, Tharoor said the Congress “is obviously very unhappy over the National Herald issue”.

“There is a perception in the Congress party that there is a sort of desire to target UPA leaders for matters that have nothing to do with politics, whether it is the National Herald, or the raid on Virbhadra Singh during his daughter’s wedding. I don’t want to raise myself as an example.  There are a lot of people who feel that political use is being made of non-political cases against UPA figures. I would say that whether or not it is true, and it is possible that it is not true, there is such a perception. And that perception undoubtedly has contributed to the growing estrangement between the BJP, as the ruling party, and the Congress as the principal Opposition party. And it is in the BJP’s interests to heal this estrangement, this rift, because it has to rule for the next three-and-half years,” Tharoor said

 

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