Govt. criticises Cong for giving dissent note on GST Bill

Jaitley said the government will try and build a consensus on the legislation and explain the rationale and reasoning to various parties.

July 22, 2015 04:38 pm | Updated November 03, 2016 03:39 am IST - New Delhi

The government on Wednesday criticised Congress for giving a dissent note in the Select Committee on GST, saying it is against its own bill and Chief Ministers and hoped the opposition party will reconsider its “irresponsible” decision.

Finance Minister Arun Jaitley said the government will go ahead with the > GST legislation in Parliament that seeks to create a simplified tax structure across the country which is “revolutionary”.

He said the government will try and build a consensus on the legislation and explain the rationale and reasoning to various parties including Congress.

“It is hardly a dissent note on the Bill, it is a dissent against the Congress party’s own proposals which were originally given. Congress MPs are giving a dissent against the suggestions made by their own Chief Ministers,” he said.

Mr. Jaitley said Congress has given its dissent note against the wish of traders who are demanding > implementation of GST due to which the country’s GDP will increase.

“I hope that the Congress party will reconsider its irresponsible decision,” he said, noting that he has never seen a political party which opposes its own legislation and gives a dissent note against suggestions given by its own Chief Ministers and state governments.

Asked if the government was hopeful of getting the bill passed, the Finance Minister said, “I am hopeful and therefore, we are going to go ahead with the GST legislation. We will still try and build consensus and explain the rationale and reasoning as far as Congress is concerned.”

He went on to say that if Congress opposes this bill, “then the country will oppose Congress. Every citizen and trader in the country will oppose Congress”.

Mr. Jaitley said, “Congress is against the country’s progress...This it has established by giving this dissent note.”

He noted that there was a consensus on this legislation after a lot of discussion and the government will try and talk to all parties to get this legislation passed.

The > Select Committee of Rajya Sabha on Wednesday placed the report of the Goods and Services Tax (GST) before the House.

Congress, AIADMK & Left file dissent

Earlier, Congress, AIADMK and left parties have filed dissent notes on the report of Rajya Sabha Select Committee citing several reasons for not supporting the Constitution Amendment Bill for rolling out GST in its current form.

The bill is “pitted with compromises, exclusions and exceptions that make it impossible for us to extend our support to the Bill in the absence of the amendments we have proposed being incorporated in the bill...” said the Congress dissent note.

The party demands that the GST rate should be capped at 18 per cent so as “unfair burden” is not imposed on consumers, particularly the poor.

The main opposition party is also against power to states to impose 1 per cent additional manufacturing tax. It has given dissent on eight points.

The Committee, headed by Bhupender Yadav (BJP), in the report said the provision of 1 per cent additional tax in its present form is likely to lead to cascading of taxes and has suggested to define the word ‘supply’

The report of the 21member Committee was tabled in Rajya Sabha. The Constitution Amendment Bill for the roll out of Goods and Services Tax (GST) has been passed by the Lok Sabha. The Upper House had, however referred the bill to the Select Committee for scrutiny.

The AIADMK’s note said that GST Council as a constitutional body “impinges” on the legislative sovereignty of both Parliament and the States legislatures.

“It also completely jeopardises the autonomy of the states in fiscal matters,” the note said, adding “we strongly object to the provision for the GST Council”.

Like the Congress, AIADMK too wants that the weightage of the vote of the Central government in the GST Council should be reduced to one-fourth of the total votes cast and that of the states increased to three-fourth.

The left parties too are in favour of reduction in central government representation the GST Council.

The party also demanded that petroleum and petroleum products should be totally kept outside GST and states should also be empowered to levy higher taxes on tobacco and tobacco products.

The note of Left parties further said the states should have leverage for protecting a particular local brand of MSME product and protecting agri-based products for promoting farmers and industry.

“GST should not be in the interest of big corporate houses, who want a free flow of goods and services with the technology promoted and owned by them,” the note added.

The bill has already been passed by Lok Sabha.

The ruling BJP-led NAD, however does not enjoy majority of its own in the Upper House.

The report has recommended that states should be compensated for five years for revenue loss after GST roll out. This was a major demand of several parties.

GST: The Arguments
The business argument

--> Simplifies tax administration --> Makes compliance easier --> Prevents 'cascading' effect --> Could add to GDP

The political argument

-->Reduces States' fiscal and political autonomy --> States can't exempt some goods and services --> Lowers States' source ability to raise money for welfare --> Indirect taxes burden lower income groups more

What's a right GST Rate?

--> In 2010, the 13th Finance Commission recommended 12 per cent GST. This will mean revenue loss for States, as VAT is already 13-14 per cent --> In 2014, State government representatives mooted a revenue neutral rate of 27 per cent. This will be an enormous tax burden on wage earners

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