With Congress on board, GST Bill may be passed next week

Govt. agrees to demand for mechanism to resolve disputes.

Finance Minister Arun Jaitley with Deputy Leader of the Opposition in the Rajya Sabha, Anand Sharma in New Delhi. File photo: R.V. Moorthy

The Bill to amend the Constitution paving the way for the rollout of the Goods & Services Tax (GST), which became a political football between the Congress and the BJP in the last few months, is all set to hit the goal post, with the main Opposition party finally lending its unequivocal support.

Speaking exclusively to

The Hindu at the culmination of weeks of backroom parleys between the government and the Congress, Deputy Leader of the Opposition in the Rajya Sabha Anand Sharma said that barring an unexpected hitch, it is a done deal; next week, the Bill will in all likelihood clear the Upper House.

The Bill, approved by the Lok Sabha in May 2015, got stuck in the Rajya Sabha, where the ruling BJP does not have a majority. The Constitution (122nd Amendment) Bill, 2014, will be taken up for consideration and passage, said Minister of State for Parliamentary Affairs Mukhtar Abbas Naqvi on Friday, in a statement on government business for the week, starting August 1, in the Upper House.

The stalemate ended after no less than seven rounds of discussions, the last of which lasted nearly an hour. After this, the Congress gave up its demand for including in the Constitution a cap of 18% on the GST rate and the government agreed to address its concerns for an independent mechanism for dispute resolution.

“We have agreed in favour of “legal ring-fencing” of the GST tax rates, which will not be specified in the Constitution, but the central GST law, the States’ GST laws and the Inter-State GST laws,” Mr. Sharma said.

The three legislations will be moved after the Constitution Amendment Bill clears Parliament and its ratification by at least half the States.

Mr. Sharma also said that the Congress is no longer insisting on 18% as the GST rate at this stage as the rates will be determined eventually by the proposed GST Council.

The second Congress demand was for an independent dispute resolution mechanism headed by a High Court judge, and not the GST Council proposed by the Centre.

Mr. Sharma said the government gave a commitment to strengthen the Bill’s provision on the Council.

“The GST Council has to be the dispute resolution mechanism but the wording in the Constitution is the real issue…it has to be very clear that this has to be the binding mechanism…the wording was weak and vague.”

When there was such a sweeping change in the indirect taxation system, he said, there are bound to be issues of implementation. Therefore the Congress feels the need for a truly independent dispute resolution mechanism. He said the government was expected to change the wording in the Bill to take care of this concern. “The government has to come back to us with the exact re-wording …it’s a formality,” he said.

A senior Cabinet minister confirmed that the talks between the government and the Congress “were almost through.”