The government is likely to gain votes that it requires to get the Goods and Services Tax (GST) Bill passed in the Rajya Sabha this year, according to a report by American investment banker Morgan Stanley.
“The government could gain the votes it needs in 2016 to pass a Goods and Services Tax (GST) bill,” Morgan Stanley said in a research note.
“The key to the bill’s passage is a reduction in the number of upper house (Rajya Sabha) members opposing the bill.
That number currently stands at 91 and it needs to fall to 82 for the bill to clear. We forecast that to happen by July 2016,” the report noted.
“Once the bill clears Parliament, getting the bill passed by more than half of the states should not prove challenging, as the BJP and its allies are currently in power in 12 of 29 states, and a few beyond the 12 are supportive of the bill,” it added.
The GST Bill, already passed by the Lok Sabha, is stalled in the Rajya Sabha, where the ruling National Democratic Alliance (NDA) lacks a majority.
Morgan Stanley said the GST Bill will have significant implications on the stock market, while six of the 10 key sectors would benefit from its implementation.
Sectors like consumption, logistics, house building materials, and industrial manufacturing are likely to experience a positive impact with GST.
However, if tobacco products and oil and gas are included in the GST, these could see a negative impact, while the remaining sectors would likely see a neutral impact, the report added.
Earlier this week, union Minister of State for Finance Jayant Sinha said the GST may get passed.
“GST is stuck in the Rajya Sabha, but we are very hopeful that the bankruptcy law will be passed. Even for GST, the numbers (seats) are going to change…so, we are hopeful of GST as well,” he said at an event here organised by the Indian Private Equity and Venture Capital Association.