GST in last lap as govt circulates new draft of the Bill to Elders

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With the BJP-led government circulating the draft of changes to the Constitution Amendment Bill on GST to Rajya Sabha members, political parties have started preparations for a final round of negotiations with the Centre.

The Centre aims to get the Bill passed this week, but the Opposition says discussions are still not still. “We have taken note of the changes proposed by the Empowered Committee. We do not want to leave out the Congress when working on such a key tax reform. So, constant discussions have been taking place… In fact, discussions at the highest level were also considered. But, now, the mood is that everyone is more or less ready for it,” a senior Cabinet Minister told BusinessLine.

A senior BJP member said, “The government is leaving no stone unturned to see the Bill through… Though the Congress is officially maintaining the same posture, it is more or less on board as it would not like to be seen as being the one against reforms.”

The Congress, which earlier was seen divided over the Bill, now seems to have softened its stance on one of the key demands — to cap the tax rates in the Constitution Bill. “Now, the Congress is seeking ring-fencing of the tax rate in the subsequent GST law, which could be considered by the government,” an official said.

“The government is yet to get back to us. As of now, there’s no change in our position,” reiterated Anand Sharma, Congress Deputy Leader in the Rajya Sabha.

In the last seven days, quick developments have happened to see the Bill through. Backed with endorsement from the Empowered Group of State Finance Ministers on the Bill with minor tweaks, the Centre got the Cabinet nod on the same, without wasting any time.

The key changes include scrapping of the 1 per cent tax on inter-State supply of goods and a guarantee to the States that any revenue loss arising from the implementation of GST would be compensated for five years.

Political commentators said the government seeking Cabinet nod without wasting any time was a smart move, as it left the Opposition with few options.

The BJP is working out various permutations and combinations to manage the Rajya Sabha to ensure the Bill sails through. Helming the action is Finance Minister Arun Jaitley, as the key negotiator. The BJP, which requires the support of 154 of the 245 Elders to get the Bill passed, has 54 members, and the NDA coalition (which it leads) has 72. The Congress, the single-largest party in the Rajya Sabha, has 60 members. If the BJP can garner the support of regional parties, including the AIADMK, the DMK, the SP, the BSP, the RJD, the CPI (M) and the Biju Janata Dal as well as at least five Independent and five nominated members, it may have enough votes to get the Bill through the Rajya Sabha. The other Opposition parties are also yet to take a final view on the Bill. “We had given some suggestions to the select committee. A final view will be taken by our leader M Karunanidhi,” said DMK’s Tiruchi Siva.

Discussions with the AIADMK, which had raised some key issues on the Bill, are going on, a government official said.

CPI (M) leader Sitaram Yechury said there has not been any change in the party’s position.

Read more at: http://www.thehindubusinessline.com/economy/policy/gst-in-last-lap-as-govt-circulates-new-draft-of-the-bill-to-elders/article8925140.ece