New Delhi: The government said it will seek Parliament’s approval for the constitution amendment bill for the goods and services tax in the monsoon session of Parliament and appealed to the opposition Congress party for its support.
Replying to a debate on the finance bill in the Rajya Sabha, finance minister Arun Jaitley on Wednesday urged the party to reconsider its opposition to the bill.
“I think when we meet in the monsoon session, it is time we reconsider our positions. We want all parties to be on board. But if not please allow parliamentary process of decision making by debate and voting to take place,” he said.
The passage of GST, an ambitious indirect tax reform that seeks to unify the country into a common market by removing all barriers across states, has been delayed with the Congress demanding changes to the bill. The Congress has demanded that the 1% additional levy on supply of goods and services should be done away with. It also favoured the tax rate to be capped at 18% in the constitution amendment bill for GST and sought an independent dispute resolution mechanism for settling disputes between states.
Responding to the Congress demands clause by clause, Jaitley said that the government is talking with states to do away with the 1% tax. He, however, pointed out that the Congress demands to cap the tax rate at 18% under the constitution amendment bill was not feasible.
“I have no problem with the figure of 18%. The idea is that it should not be a high rate of taxation. But let me just assume a crisis situation. Say there is a drought in the country and for one year 5 states want to charge 20%. Are we then going to amend the constitution? We all know how difficult it is to amend the constitution. The second fallacy of 18% is that there can’t be a uniform tax on all commodities. Should a BMW car manufactured in India be taxed at 18% and not a higher rate? Why do you want a constitutional cap?” he said.
He also strongly opposed the Congress’s suggestion for an independent dispute resolution authority headed by a judge that would decide on disputes between states and between states and the centre.
Jaitley said this idea was strongly opposed by the states and pointed out taxation matters are a political decision.
“Why do you want to surrender parliamentary and state legislature’s jurisdiction to the courts? Taxation is the last of the powers with the legislature and you are talking about surrendering it.” Jaitley said.