 "Modi_Sonia")
Prime Minister Narendra Modi on Friday hosted Congress president Sonia Gandhi and former Prime Minister Manmohan Singh over tea at his official residence at 7 Race Course Road to find middle ground on the government’s key tax reform, the goods and services tax (GST) Constitution amendment Bill.
It was the first time in his 18-month tenure that the PM reached out to the Congress leaders in the manner he did on Friday. Sources in the Congress said the only other occasion when the PM had spoken to the Congress president was over the Naga peace accord earlier this year. Sources in the government and the Congress party termed the 45-minute long meeting an ‘icebreaker’.
While both the Congress and the government viewed it as an ‘introductory meeting’, there was hope in the government camp that this could pave the way for passage of the GST Bill in the ongoing winter session of Parliament. The Bill is pending in the Rajya Sabha, with the Congress demanding three amendments. The government hopes to roll out the tax reform at least by October 2016.
Finance Minister Arun Jaitley, who was present at the meeting with Parliamentary Affairs Minister M Venkaiah Naidu, said the two sides would have another meeting in the days to come to discuss their respective positions on the Bill. He said the Congress leaders put forward their position on their three demands, while the government side explained the history and background of the legislation and the government’s response to the issues.
“There would be, after sometime, a fresh contact between the government and the Congress to discuss this subject further, after they have discussed within the party and we have also considered the position they have taken to us,” said Jaitley.
A Union minister said some of the Congress demands on the GST Bill were “definitely reasonable”.
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Congress leader and spokesperson Anand Sharma termed the meeting a “constructive engagement” and a “work in progress”.
“Our position or demands are not political. There is merit in what we have raised. We want GST to be truly effective.”
The Congress has maintained how the government had made no effort to reach out to them. The party’s leadership claims that had the BJP brass reached out to them on the land Bill, they could have struck some compromise. But with no outreach, the NDA’s Bill came a cropper.
The Congress' three objections include the demand for specifying the proposed 18 per cent rate in the Constitution amendment Bill, opposition to additional one per cent levy on inter-state movement of goods and 100 per cent compensation to states for revenue loss for five years.
At the meeting, the finance minister explained the difficulties of incorporating the Congress’ demand of stipulating an 18 per cent cap on the GST rate in the Constitution amendment Bill itself, but it could be reflected in the GST legislation that would follow.
According to Congress insiders, Congress Vice-President Rahul Gandhi is firm on having a cap on the GST rate as it would be in the interests of the common man; so, a decision on this would need to be taken in consultation with Rahul Gandhi. Naidu is slated to coordinate and liaise with them.
The GST Bill is pending in the Rajya Sabha, which is slated to continue the discussion on the contribution of B R Ambedkar to the drafting of the Constitution on Monday as well. This gives both sides time for back-channel talks to reach an agreement on the tax reform Bill, which the government hopes to roll out at least by mid-2016. The winter session concludes on December 23.
The invite for tea to the Congress leadership was extended at the PM’s behest on Friday morning. Meanwhile, the All India Anna Dravida Munnetra Kazhagam (AIADMK) on Friday reiterated its opposition to the GST. AIADMK’s Member of Parliament K Gopal said the tax reform would cause huge revenue loss to Tamil Nadu.
