The Congress Party is expected to press for an 18-per cent cap on the goods and services tax (GST) rate when the GST Council meets to hammer out the issue on October 18.
Before the Congress had supported the government on the Constitution amendment Bill for the GST in the monsoon session of Parliament, party VicePresident Rahul Gandhi had expressed views in favour of such a cap during internal debates.
Congress chief ministers are likely to reiterate this stand at the GST Council’s meet, sources said.
Congress chief spokesperson Randeep Surjewala told Business Standard: “All the parties appear to be on the same page over the 18 per cent GST rate.”
Party sources further said the government may propose differential rates, over 18 per cent for high-end goods and below 10 per cent for essentials. This formula would allow the government to earn revenue from luxury items, but would provide relief to the public.
Party sources said they will take a call when the proposal comes up formally.
Congress leaders said they have been pressing for the GST rate cap to protect consumers’ interests, as they could suffer if the government decides to increase the tax rate arbitrarily. The Congress also wants both houses of Parliament to approve the rate.
Party sources also said states where the Congress is in power are not producing states. Hence, they may not be on the losing side when the GST is rolled out next year.
Industrial states like Tamil Nadu and Maharashtra had expressed reservations against the GST, but the centre agreed to compensate them for five years, they pointed out.
Sources, however, said the views of big non-Congress ruled states like West Bengal and Uttar Pradesh need to be considered. At the first meeting of the GST Council on service tax assessment, a consensus was reached on area-based exemptions. In the second meeting, the council agreed on five subordinate legislations dealing with issues ranging from registration to invoicing under the GST regime.