In no mood to allow the government a walkover on the Goods and Services Tax Bill, the opposition Congress has finalised dissent notes for submission to the Select Committee of Rajya Sabha reviewing the tax reform legislation.

The 21-member committee will adopt the final report on the Bill this Monday when it meets to complete its task. The report is to be presented in the Rajya Sabha within a week of Parliament opening for the monsoon session on July 21. The panel members are learnt to have met today and held clause-by-clause discussions on the Bill. Congress MPs, including Madhusudan Mistry and Mani Shankar Aiyar, would submit dissenting notes on the report, arguing against the current draft that has failed to include the party’s five “non-negotiable demands” (see box).

“We have finalised dissenting notes, which present our long-held view on the GST Bill,” said a senior Congress leader. The party believes that without its support, the government would find it tough to manage two-third majority (180 MPs) to pass the Bill in the Rajya Sabha. The note draws hugely from arguments put forth by former  PM Manmohan Singh during a meeting of Congress CMs on June 9.

Singh, who also attended a meeting of the Congress strategy group held to discuss the GST and other major legislations, said, “If the revenue-neutral GST rate is in excess of that prevailing elsewhere, we may not be able to derive adequate benefit from the tax. The provision of 1% additional levy on the supply of goods which, unlike the GST is an origin-based and not consumption-based tax, also needs a fresh look.

“There is also merit in the demand by states for 100% compensation for revenue losses in the first five years, unlike the provision in the present Bill for 100% compensation in the first three years; 75% in the fourth year and 50% in the fifth year.”

Oppn’s  5  demands

1 Withdrawal of additional 1% levy on goods as goods pass through several states and the end tax could end up being prohibitive

2 Revenue-neutral GST rate to be fixed at 18% instead of current 27% 

3 Inclusion of tobacco, electricity, petrol and alcohol among items to be covered by GST

4 Provision of a dispute redressal mechanism system in the law

5 100% compensation for five years to states that lose money due to the proposed tax reform