GST rate should be below 20%: Congress

The party wants to cap at less than 20 percent, scrap a proposed state levy and create an independent mechanism to resolve disputes on inter-state revenue sharing

The proposed goods and services tax (GST) should be set at a rate of less than 20 %, the opposition Congress party said on Thursday, signalling willingness to compromise as long as the government takes into account its concerns.

The comments by senior Congress leader Anand Sharma came as parliament opened its winter session, with the proposed new sales tax topping the to-do list of Prime Minister Narendra Modi's nationalist government.

Congress first proposed the tax when it was in government, but political hostilities since Modi's general election triumph 18 months ago have stalled the measure that seeks to create a single market and boost commerce in India's $2 trillion economy.

"The government should come up with structured proposals on GST," Sharma, chief tax negotiator for Congress and its deputy leader in the upper house, told Reuters.

The bill has been passed in the lower house of parliament, but has been blocked in the upper house where Modi's coalition lacks a majority.

The government is trying to win over small regional parties to build the two-thirds majority required to pass a key constitutional enabling amendment, but needs to bring around the Congress to be sure it can pass.

Congress would like to cap the rate of GST at less than 20 percent, scrap a proposed state levy and create an independent mechanism to resolve disputes on revenue sharing between states, Sharma said.

Finance Minister Arun Jaitley said in a television interview on Wednesday night that these three Congress demands had not been included in its original GST bill.

"GST was not our idea - it was a Congress idea but it's a good idea," Jaitley told the NDTV news channel. "I hope the Congress sticks to the good it proposed rather than flaw it."