India’s main opposition party won’t block a bill paving the way for a national sales tax if Prime Minister Narendra Modi meets three demands, a Congress party leader said.
Congress wants the rate of the goods-and-services tax capped at 18 percent, the removal of a proposed 1 percent additional levy on inter-state trade and an independent dispute resolution mechanism for states. The party first proposed the GST in 2006 but the bill has been stuck in parliament in tit-for-tat politics, with certain clauses diluted, as Modi seeks to win lawmaker support.
“We have told them if they address three points, we will have no problem,” Mallikarjun Kharge, Congress’s leader in India’s lower house of parliament, said in an interview on Thursday, referring to Modi’s government. “They don’t take others’ views into account. ”
Modi’s government had originally planned to introduce the levy in April, converting India’s 29 states into a single market. However that deadline is now impossible to meet as the bill remains stalled in the opposition-dominated upper house, which worked for only about half the scheduled hours in the previous session, according to PRS Legislative Research.
The central bank has said the GST is an “immediate necessity” to help India achieve its potential growth rate as revenues rise on increased compliance. That would be about 10 percent according to some estimates — from a forecast 7.6 percent in the year through March.