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Congress party threatens to block landmark GST bill

The select committee had recommended a new definition of “supply”, which sources said would be included in the two other Bills -Central GST and State GST – that would be moved after Parliament and the states endorses the Constitution Amendment Bill.

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The failure to incorporate a GST Dispute Settlement Authority, as provided for in the 2011 bill, is a serious lacuna that must be filled, they said.

The report on the Bill was sent presented to the Upper House this morning.

The government is keen to get the bill passed by parliament in its upcoming session, but it will need the support of Congress to ensure its passage in the upper house.

In a clause relating to levy of one per cent additional tax by states, the committee suggested that the levy should only be on “all forms of supply made for a consideration”. The committee has suggested that the provision in the bill that provided Centre “may” compensate states for a period up to five years for any revenue loss to be substituted by a commitment for compensation for five years.

The bill is “pitted with compromises, exclusions and exceptions that make it impossible for us to extend our support to the Bill in the absence of the amendments we have proposed being incorporated in the bill…” said the Congress dissent note.

It rejected the demand of opposition parties for lowering Centre’s say in the GST Council, the current representation of Centre having one-third and states having two-thirds representation will continue.

Union Finance Minister Arun Jaitley on Wednesday asserted that the government would go ahead with passage of GST despite opposition from the Congress. The report, however, is not liked by the Congress, AIADMK and Left parties. Various voluntary organisations and states had demanded that states should have the right to levy taxes on tobacco and tobacco products. But several parties from states such as Uttar Pradesh, Bihar, West Bengal and Odisha are not averse to GST given that the “consuming” states stand to benefit.

While Congress is in favour of the proposed indirect tax regime, it wants a ceiling of 18 per cent on the GST tax rate. The final rate, however, would be decided by the GST Council. A Parliamentary Committee, which scrutinised the crucial GST Bill, has prepared a draft report, the report will be considered by the Select Committee of Rajya Sabha when it is expected to be adopted for presentation in Parliament.

“GST rate at 20 per cent is a practical proposition”.

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-> In 2010, the 13th Finance Commission recommended 12 per cent GST.

11:48 
   
              Lok Sabha adjourned for the day