The Narendra Modi government’s intention to get the Constitution amended for rolling out a unified Goods and Service Tax (GST) from April 1 next year looks unlikely to fructify in the coming monsoon session of Parliament considering the changes the opposition, especially the Congress, wants in the amendment Bill.
The Narendra Modi government’s intention to get the Constitution amended for rolling out a unified Goods and Service Tax (GST) from April 1 next year looks unlikely to fructify in the coming monsoon session of Parliament considering the changes the opposition, especially theCongress, wants in the amendment Bill.
With the political atmosphere vitiated by the Lalit Modi controversy and the Vyapam admission test scam in BJP-ruled Madhya Pradesh, the Parliament session could prove to be stormy, upsetting the government’s legislative agenda.
Sources said the Congress was likely to insist on crucial changes, which are either difficult to be incorporated or are set to be opposed by state governments, in the (GST) Constitution (122nd Amendment) Bill. These include prescribing a cap (18%) on the combined GST rate (for the Centre and states) within the Constitution itself which would make any subsequent change in the tax rate administratively difficult, and dropping the provision for the 1% extra tax that exporting states can levy in the first two years of the GST regime.
While the revenue neutral rate for GST is seen to be around 25-27%, there have been voices even from within the central government against the 1% additional tax meant to support the manufacturing states.
The select panel of Rajya Sabha members led by Bhupender Yadav, which discussed the provisions of the Constitution (122nd Amendment) Bill on Tuesday, would meet again on Friday to firm up its report to be submitted to the House before the three-week long session starts on July 21. While the panel chairman is from the BJP, its members are mostly from opposition parties, who intend to give dissenting notes if their suggestions are not incorporated in the Bill, sources privy to the discussions said.
Dissenting notes are not uncommon in Bills; however, considering BJP’s minority status in the Rajya Sabha and the two-third majority required for constitutional amendments, not taking opposition views on board — especially of Congress — will not help in getting the Bill passed, sources said. In the 245-member Rajya Sabha, the ruling coalition is a minority with only 65 seats, along with allies. The Bill was passed in the Lok Sabha in May despite a walkout staged by the Congress.
If the government misses the monsoon session, it still has a chance to get the Bill cleared in the winter session, so that in the budget session in 2016 February, it can enact Bills regarding Central GST and Integrated GST, while states can ratify the constitutional amendment as well as enact state level GST laws. Finance ministry sources say that they are prepared to meet the April 1 deadline, despite the political odds confronting the mega indirect tax reform.