Referring to the continuing saga of confrontation with the Congress party in parliament, Finance Minister Arun Jaitley on Wednesday again held the party responsible for the impasse on the proposed goods and services tax (GST)."If my friends (Congress), who are not present in House today, allow implementation of GST, which was introduced by Congress, you will have an uniform tax rate, one market and it is capable of boosting economy by 1-2 percent," said Jaitley in the Lok Sabha.Earlier, acknowledging that there might be merit in the Congress' demand for an 18 percent rate of GST, the finance minister in a Facebook post on Sunday held the party responsible for disrupting parliament and said "its obstructionist tendencies inflict an economic injury on the country".
"The Congress members have proposed that a rate of GST be fixed in the constitution as not exceeding 18 percent. There may be some rationale in the rate recommended by the Congress," Jaitley said in a point-wise rebuttal of the Congress' dissent note to the Rajya Sabha Select Committee on the GST."However, the rates of taxation are usually not fixed in the constitution. The rates have to be recommended by the GST Council depending on various factors such as economic conditions, revenue buoyancies etc. and incorporated in the GST laws," he stated on Facebook."The state governments belonging to the Congress have consistently supported the proposal. Is it only out of an obstructionist attitude that the Congress has adopted a negative role?" he asked.House proceedings have been repeatedly disrupted since it re-convened last month, over issues like the Lalit Modi controversy and the admission and recruitment scam Vyapam in Madhya Pradesh.
"Since parliament is not functioning and there is no way to clarify these points before the same, I am constrained to place the above facts in public domain," the finance minister wrote in the Facebook post titled "Dissent or Disruption - The Congress Party's Position on GST"."Should its (Congress) obstructionist tendencies inflict an economic injury on the country?" he asked.The cabinet last week gave its nod to some changes recommended by a parliamentary panel, notably an extra one percent levy to compensate the states for potential tax losses.The GST seeks to create a single Indian market by subsuming most indirect tax levies of the central and state governments, such as excise duty, service tax and value-added tax that is seen as facilitating tax compliance, and curbing inflation through better supply chains.
But securing legal sanction for GST is proving a lengthy process, given the Bharatiya Janata Party's lower strength in the upper house.Being a constitution amendment bill, it needs passage in parliament with two-thirds majority, following which at least 15 state legislatures have to ratify it, before being sent to the President for his assent.The opposition is mainly opposed to the proposal for a 1 percent additional tax on goods travelling from one state to another, as it is felt it would not only push up prices, but also have a cascading effect.Shortly ahead of the cabinet meeting on Wednesday, Congress leader M. Veerappa Moily, also the chair of the parliamentary panel on finance, expressed his reservations.
"Right from the beginning, we have been telling that there is no need for effecting such amendments through a series of ordinances. There is some deficiency in this government," Moily told reporters on the sidelines of a seminar organised by industry chamber Assocham.According to the bill, when goods move from one state to another, an additional one percent tax would be levied. But the opposition said it would lead to a cascading effect.The central government has set the target to reform India's indirect tax regime from April next year. It had earlier proposed 100 percent compensation to states for the first three years.