NEW DELHI: The Monsoon Session of Parliament may not be the only collateral damage that the NDA Government, currently on the back foot over the Lalit Modi scandal, may face. The Goods and Services Tax Bill — or the enabling 122nd constitutional amendment requiring two-thirds majority in both the Houses — would not be supported by the Congress unless its five demands are met.
Sensing the palpable turmoil in the BJP, the Congress has indicated a toughening of stand that suits it politically. Despite the birthday wish from Prime Minister Narendra Modi and the “thank you” tweet in reply from Rahul Gandhi, there is no let up on the GST issue.
The Congress vice president, it appears, is adamant about not making it easy for the NDA Government to take credit for the passage of the massive tax reform that would virtually unite the country’s economy for the first time since Independence.
Young Congress leaders are “goading the party to do to the NDA what the BJP, as an Opposition, did to the UPA by stalling the GST bill for eight years”.
Of the clauses on which the Congress is opposing the GST Bill, now before a select panel of the Rajya Sabha, the most crucial is the one per cent surcharge or the destination clause. According to the Congress, particularly former Finance Minister P Chidambaram, the surcharge would defeat the purpose of GST. The Congress position is that one per cent surcharge on interstate sales of goods is a new distortion that “will defeat the purpose of GST”.
The provision has been introduced at the behest of some manufacturing states such as Gujarat and Maharashtra, now ruled by the BJP, since the GST tends to favour consuming states more than the manufacturing states.
Next, the Congress wants the ceiling of GST to be reduced to 18 per cent from 26 per cent. This again is a Chidambaram formulation, going by which the Congress says, the “common man cannot be burdened with such heavy taxation”.
Also the plan to keep alcohol, petroleum products, electricity duty and tobacco outside the GST ambit in the initial years has been deemed “retrogressive” by the Congress.
Instead of subsuming the multiple level of central and state taxes, attempts are being made to retain the structure.
The Congress also wants clarification on dispute resolution mechanism, between the states and between the Centre and states.
The current proposal of voting, according to the party sources, could not be used to address taxation disputes of the states.