Govt optimistic on GST passage

The new MoS Finance says Congress party's demand for capping the GST rate in the Constitution was 'not practical' and the government is trying for a consensus

Minister of State for Finance Arjun Ram Meghwal expressed hope that the Rajya Sabha would clear the Constitutional amendment for a proposed national goods and services tax (GST), with support from regional parties.  On the sidelines of an Assocham event, he said the Congress party's demand for capping the GST rate in the Constitution was "not practical" and the government was trying for a consensus.

“There are many chief ministers — of UP, Odisha, West Bengal, Bihar — who all want GST to come fast...We hope the Rajya Sabha will be able to pass the Bill in the third week of the session," he said. The current session of Parliament began on Monday and ends on August 12.

The Congress, which originally mooted GST in the Budget for 2006-07, to replace all indirect taxes, has been demanding the overall rate be capped at 18 per cent and an additional one per cent tax designed to compensate manufacturing states that fear loss of revenue be scrapped. Recently, it indicated it was open to have the cap in the accompanying GST Bill, rather than in the Constitutional amendment.

Janata Dal chief and Bihar chief minister Nitish Kumar met finance minister Arun Jaitley on Tuesday. He supported the government position that the tax rate not be mentioned in the Constitutional Bill and be left to the proposed GST Council to determine.  Talking to the media after his meeting, Kumar said any cap on the GST rate would be discriminatory on states, as it would take away their powers to generate revenue. Bihar's tax revenue has plummeted after Kumar's government imposed prohibition on liquor in April.

The Centre had earlier planned to introduce the GST, which intends to convert 29 states into a single market through a new indirect tax regime, from April 1 this year. However, the legislation has yet to pass the opposition-dominated Rajya Sabha, after having passed the Lok Sabha.

Information & broadcasting minister Venkaiah Naidu said: "We want to get the GST passage through consensus. Although we feel the adequate numbers are there, we would like to see the House approve it unanimously."

Naidu said the biggest beneficiaries of GST will be the states, and the chief ministers want it to be passed at the earliest. "The signals I am getting from all sides is positive."

The government has agreed to a five-hour debate on the Bill in the Rajya Sabha in the current session.