Finance Minister Arun Jaitley has reached out once again to the Congress Party asking it to re-consider its stand on the goods and services tax bill which is likely to headline the winter session of Parliament set to begin 26 November. Jaitley’s effort to stitch up a swift and likely tacky consensus has regained steam after BJPs huge loss in the Bihar elections.
The GST Bill, which will ‘absorb’ all indirect taxes and integrate the country into a single market, has been approved by the Lok Sabha and is pending approval of the Rajya Sabha. The political alphabet soup looks like this: JD(U) has 12 members in the Rajya Sabha, the ruling NDA is well short of majority, RJD has only one MP, Tamil Nadu has already indicated where it stands saying that the bill compromises state autonomy.
It is now relatively clear now that the Janata Dal ( United), fresh from its Bihar victory is likely to gang up alongside the Opposition unity against the GST bill ( which JDU earlier supported).
“There are new circumstances. We will take a decision in consultation with other opposition parties,” a JD(U) MP said.
Congress, a part of the Grand Alliance which has taken power in Bihar, has opposed certain provisions of the reform bill and blocked its passage in the Monsoon Session of Parliament.
The Government has a long shopping list of bills to pass in the winter session. The GST bill and the Real Estate Bills are likely to dominate the session’s early rounds of political jabbing.
Jaitley has clearly come down several rungs in a big to get the GST done and dusted. “It would be unfair to the country to impose in the name of compromise, a defective GST. I will expect the party which ruled India for nearly half a century to reconsider some of the suggestions,” he said, indicating his willingness to tweak the provisions and save face for the Government.
BJPs Rajya Sabha numbers
The Rajya Sabha currently has 242 sitting members. The BJP had desperately needed to win Bihar to improve its Rajya Sabha numbers, which stands at 48. The BJP, along with its allies, is terribly short of a majority in the Upper House and many of the Government’s high priority bills are stuck because of this lack of muscle.
What is the GST Bill?
The Goods and Service Tax Bill or GST Bill proposes a national Value added Tax to be implemented in India from April 2016.
It intends to be a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India, to replace taxes levied by the Central and State governments. GST would be levied and collected at each stage of sale or purchase of goods or services based on the input tax credit method. This method allows GST-registered businesses to claim tax credit to the value of GST they paid on purchase of goods or services as part of their normal commercial activity. Taxable goods and services are not distinguished from one another and are taxed at a single rate in a supply chain till the goods or services reach the consumer. Administrative responsibility would generally rest with a single authority to levy tax on goods and services. Exports would be zero-rated and imports would be levied the same taxes as domestic goods and services adhering to the destination principle.
The Hindu has a quick fix on ten highlights of the GST bill introduced in 2014 by Jaitley.
With opposition parties buoyant after NDA’s drubbing in Bihar, senior JD(U) leaders have said they will take a final call only after consulting other parties
Subramanian panel report
The Arvind Subramanian-led panel on recommending revenue-neutral rates for the proposed Goods and Service Tax (GST) would submit its report in the first week of December, senior policymakers said on Monday.
Tamil Nadu has opposed GST saying it compromises the autonomy of States in fiscal matters. “The decision-making rule and voting weightage gives Government of India an effective veto in GST Council and no distinction is made amongst the States in the weightage,” is Tamil Nadu’s official line. Another key demand from Tamil Nadu is that petroleum and petroleum products be totally kept outside the GST purview. Also, TN wants 100 per cent compensation to states for a 5 year period. Just yesterday, in what is overtly an unrelated transaction, the Central government released Rs 900 crore to Tamil Nadu for flood relief.