With 352 votes in favour, the Constitution (122nd Amendment) Bill for introduction of Goods and Services Tax (GST) sailed through the Lok Sabha on Wednesday.
The fierce opposition displayed by the Congress, the BJD and the CPI(M) on Tuesday did not translate into hurdles for the government.
The Congress, in fact, walked out of the House, effectively helping the passage of the Bill while the BJD and the CPI(M) voted in favour. Only 37 votes were cast against the Bill — by the AIADMK members.
The Bill proposes to empower both States and the Centre to levy the GST, which will subsume the services tax, excise duties, stamp duties, entry tax and central sales tax.
It proposes that the Centre be empowered to tax sales of goods and States get to tax services.
It has been estimated that the efficiency and savings from the shift to a well-designed GST regime can boost India’s growth by up to 2.5 percentage points.
Opposition to GST unlikely in Rajya Sabha
The smooth passage of the Bill for introduction of GST in the Lok Sabha gives some hope for the government in the Rajya Sabha also, though it does not have a majority there. The constitutional amendment will need two-thirds majority in the Upper House where it is expected to come up some time after Thursday.
The Congress is keeping its cards close to its chest on its strategy for the Bill in the Upper House, though there is a school of thought in the party, said sources, that does not want it to be been seen as an obstacle to the passage of a legislation for such a significant reform.
AIADMK not in favour
The AIADMK is, however, likely to continue to resist the Bill in its current form as the party feels it is “harmful” to producing States such as Tamil Nadu.
Notably, Prime Minister Narendra Modi was not present at the time of voting, though is party had issued a whip.
Mr. Jaitley was seen ticking off Minister of State for Parliamentary Affairs Rajiv Pratap Rudy for sloppy floor management as 12 BJP members ended up voting against one of the Bill’s clauses rather than for it.
Some Opposition members withdrew their proposed amendments in the Lok Sabha on Tuesday saying they had received assurances on their concerns from Mr. Jaitley.
“I straightaway concede that 27 per cent would be very high… This figure is going to much more diluted... These are figures that will be decided by the GST Council,” Mr. Jaitley said in the Lok Sabha during his reply to the debate on the Bill.