The report of the Committee, headed by BJP’s Bhupender Yadav, which was tabled within the Rajya Sabha, recommended modifications in clauses pertaining to compensation however endorsed different 19 provisions like maintaining alcohol out of the regime and leaving it to the GST Council to determine on timing of levying GST on petroleum merchandise. The GST is expected to provide great relief as it will subsume within itself many other taxes being levied at present like excise, service tax, and local levies. The parliament was adjourned in the midday today after the opposition Congress party set an uproar over a corruption scandal at the ruling BJP. The bill has been passed by the Lok Sabha and the Rajya Sabha had sent the bill to the Select Committee for scrutiny. The party has been pitching for a “simple and comprehensive” Goods and Services Tax (GST) and not the constitution amendment bill brought by the government. However, the panel proposed that the Central Government fully compensate the states for revenues lost as a result of the reform for a period of five years, whereas the Government has proposed that states should be given 100 percent compensation only for three years, and 50 percent for the following two years.
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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”.
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.
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.
“Administratively, we are taking all steps, both the Centre and states, to meet the April 1, 2016 deadline”.
To increase the resources of states, the Committee suggested that the “band” rate should be defined in the Act itself.
Jaitley said, “Congress is against the country’s progress…This it has established by giving this dissent note”.
“It is hardly a dissent note on the bill; it is a dissent against the Congress party’s own proposals which were originally given”. The final rate, however, would be decided by the GST Council.
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Jaitley said the Congress has given its dissent note against the wishes of traders who are demanding the implementation of the GST, which is key to raising the country’s GDP.
