New Delhi: A day after the government managed Parliamentary approval for Aadhaar, it moved to draw the battle lines in the next legislative fight: goods and services tax (GST).
On Thursday, speaking at the India Today Conclave, finance minister Arun Jaitley rejected the Congress’s demand to cap the tax rate under GST in the Constitution amendment bill itself.
He said it would be difficult to accede to Congress’s demand.
The government has consistently maintained that it is not possible to cap tax rates in the Constitution amendment bill as it would then need to seek the support of two-third members of both houses of the Parliament for any changes in the tax rates necessitated by future developments.
The government has been trying to push for the passage of the Constitution amendment bill for more than a year now but unsuccessfully. The bill needs the support of two-third members of both the houses. The ruling alliance is well short of these numbers in the Rajya Sabha and requires the support of the Congress for passage of the bill.
But the Congress is adamant that it will support the bill only after its demands are incorporated in the bill.
Besides capping the tax rate, the Congress wants that the additional 1% levy proposed in the bill for two years be done away with. It has also sought an independent dispute resolution mechanism for settling disputes among states.
Though the Congress had hinted that it is ready to yield on its demand for capping the rate in the Constitution amendment bill and agree for it to be capped in the legislations that will follow this constitution amendment, both sides haven’t been able to arrive at a consensus.
Speaking at the recently concluded Advancing Asia conference, Jaitley had expressed hope that the government will be able to pass the Constitution amendment bill for GST and the Insolvency and bankruptcy code 2015 in the second half of the budget session.
GST aims to unify the country into a common market by removing barriers across states. It will subsume all indirect taxes at the state and central levels and improve the ease of doing business for companies. All set to miss its implementation date of 1 April 2016, it is now likely to be implemented only on 1 April 2017.