Govt., Congress inch closer on GST Bill

A top government source told The Hindu that the Centre was not averse to introducing a proposal in the Constitutional (122nd Amendment) Bill.

A breakthrough on the GST Bill may be at hand. After months of squabbling, the NDA government and the Congress are on the same page on two of the three main points raised by the Opposition party. The third hinges on the technicalities of defining a cap for the GST rate. The Centre has committed itself to dropping the 1 per cent additional tax as sought by the Congress.

A top government source told The Hindu that the Centre was not averse to introducing a proposal in the Constitutional (122nd Amendment) Bill providing for the setting up of dispute resolution mechanism as suggested by the Congress, though it prefers that it be chaired by the Union Finance Minister.

Written commitment

The government has already committed to dropping the proposed one per cent additional tax in line with the Congress’ demand. The Congress though, has demanded that the government submit its reworked proposals, reflecting the common meeting ground, in writing.

The source said the decision on capping the GST rate would have to taken after considering several issues. The Centre could consider a proposal to specify the cap in Constitution itself, a key demand of the Congress; it would however, be practical to either peg it above 18 per cent or spell out the conditions under which the GST rate could be raised, he said. “Consider emergencies…and the need to raise extra revenue…will the Constitution have to be amended?”

Flexibility built-in ? The option of introducing the cap in the GST law (to be introduced in Parliament after the passage of the Constitution Amendment Bill) instead of the Constitution may not be feasible, the source said. “Putting the cap in the GST law will give the government of the day the flexibility to alter it freely by moving simple amendments as part of the annual finance bill.”

The Congress, on the opening day of the monsoon session, sounded more conciliatory. The party’s deputy leader in the Rajya Sabha, Anand Sharma, said: “The government will have to sit with the opposition to achieve a compromise.”

He also said the government would have to first sort out things with the Congress as the principal opposition party before calling an all-party meeting and fixing a date to bring the Bill to the Rajya Sabha. Official sources said the Bill was unlikely to come up this week though the Business Advisory Committee had allocated four hours for it.