Jaitley meets Nitish; to court TRS, TDP leaders for GST

Ahead of the GST test in Rajya Sabha, Finance Minister Arun Jaitley today met Bihar Chief Minister and JDU leader Nitish Kumar and is likely to court senior leadership of Andhra Pradesh and Telengana parties -- TDP and TRS -- this weekend.
Jaitley, who is counting on support of regional parties for passage for the Constitutional Amendment Bill on Goods and Services Tax (GST), met Kumar in Parliament House here.
GST and support for government stand against Congress demand for a constitutional cap on the tax rate figured in the discussions, official sources said.
Kumar, they said, supported government stand that tax rate should not be mentioned in the Bill and the decision should be left to the GST Council.

Also figured in discussions was Bihar government's demand for release of backward region grant for the state.
The government, which has agreed to a five hour debate on the GST bill in the Rajya Sabha, is keen to get the law passed during the current Monsoon Session of Parliament that ends on August 12.

Jaitley, sources said, will visit Hyderabad this weekend and is likely to meet TDP leaders and Andhra Pradesh Chief Minister N Chandrababu Naidu and TRS supremo and Telangana Chief Minister K Chandrasekhar Rao.
TDP has six members in the 247 member house, while TRS has three. JDU has 10 members in a House where the ruling NDA does not have a majority. Congress with 60 members is the single largest party in Rajya Sabha. BJP has 53 members.

The Congress, which originally mooted the GST in 2009 to replace all indirect taxes, has been demanding that the overall rate be capped at 18 per cent and scrapping of an additional 1 per cent tax designed to compensate manufacturing states that fear losing revenue.
GST Bill, which intends to convert 29 states into a single market through a new indirect tax regime, was earlier planned to be introduced from April 1 this year, but the deadline was missed as the Bill to roll it out remains in a limbo in the Opposition-dominated Rajya Sabha.
After Parliament approves the constitutional amendment to allow GST, it needs to be ratified by more than half of the states. Then, Parliament must pass another Bill to implement GST.

After the Constitution Amendment Bill is passed in Parliament, there are three more legislations - Central GST (CGST), State GST (SGST) and Integrated GST (iGST) - which are required to be passed.
And since there is no scope now for earning any old
currency because all exemptions have been waived, it makes sense to go deposit all the holding in one go, Jaitley said. "This is the objective of the order passed today."
After banning old 500 and 1,000 rupee notes on November 8, the government had allowed all of the cash holdings with any person to be deposited in bank accounts till December 30. There was no limit on the quantity or value of the junked notes that could be deposited.

However, the government on December 17 issued a gazette notification putting restrictions on deposits henceforth.
"The deposits of old notes of Rs 500 and Rs 1,000 denominations have been reviewed by the government from time to time. Already more than five weeks have elapsed since the time of the announcement of the cancellation of the legal tender character of these notes. It is expected that, by now, most of the people would have deposited such old notes in their possession," an official statement said.
With a view to "reduce the queues in the banks", the government said it has now been decided that "amounts exceeding Rs 5,000 in old notes can be deposited only once between now and December 30, 2016."

"The banks have been advised to conduct due diligence regarding the reasons for not depositing these notes earlier," the statement said.
Amounts of Rs 5,000 or less may continue to be deposited with banks in the customer's account, as at present.
"However, cumulative deposits exceeding Rs 5,000 between December 19 and December 30, 2016 will be as per the procedures advised by the RBI in respect of deposits exceeding Rs 5,000," it said.
The Reserve Bank of India (RBI) too came out with deposit guideline stipulating that restrictive conditions will also apply on the cumulative deposit of such notes in a single account when it exceeds Rs 5,000.

However, the defunct currency up to any amount can be deposited under the new black money amnesty scheme, PMGKY.