Efforts to hammer out consensus on GST gather momentum

The stage is set to bring the long-pending General and Service Tax (GST) Bill out of cold storage and facilitate its passage in Rajya Sabha. The government on Thursday reached out to leaders of several Opposition parties, including that of the Congress and the Samajwadi Party, on the matter and requested for their support for its passage next week.

The Bill seeks to introduce a system for uniform taxation across the country and has been pending for a long time before the Rajya Sabha with the principal Opposition Congress stoutly opposing it. 

Finance Minister Arun Jaitley on Thursday separately met leaders of Congress, Left parties, Samajwadi Party and JD(U) and discussed with them the changed provisions of the GST Bill. “Talks are on with various parties on GST,” a senior government functionary said. Jaitley is reported to have met Leader of Opposition in the Rajya Sabha Ghulam Nabi Azad and former Finance Minister P Chidambaram in the Central Hall of Parliament. He also met the deputy leader of Congress in Rajya Sabha, Anand Sharma.

Former Finance Minister Chidambaram, who had initially piloted the Bill, has been mandated by his party to engage the government on the matter. Besides, Jaitley also met SP leader Ram Gopal Yadav and CPI(M) general secretary Sitaram Yechury. Prime Minister Narendra Modi also held discussions with Yadav when the Rajya Sabha was adjourned briefly during the Question Hour. Modi remained seated in the House during the brief adjournment and spoke to Yadav and another SP member Neeraj Shekhar.

These meetings came a day after the Union Cabinet approved two key changes to the GST Bill that addressed the concerns of state governments and Opposition parties. With the Centre accepting the changes, the NDA government has indeed taken a giant step to bring state governments on board.

The Cabinet removed from the Bill the contentious provision for a 1% additional tax levy by manufacturing states and also introduced a guarantee of 100% to states for five years to compensate for any revenue loss incurred by them due to the introduction of GST. 

However, from the Congress point of view there are still two more demands that have not been completely met. These demands are–including the GST rate in the statute and setting up a Supreme Court judge-headed dispute resolution body. These demands have not been accepted.

As the GST is a Constitution Amendment Bill, it requires 2/3rd of the House - that is 162 members - present and voting. According to sources, Government has marshalled support from 145 members in the 245 member House but would need the Congress to be present and voting to meet the constitutional obligations.