1. GST a Congress Bill, party’s negativism hurting economy: Arun Jaitley

GST a Congress Bill, party’s negativism hurting economy: Arun Jaitley

Racing against time to get the GST bill cleared from Parliament, Finance Minister Arun Jaitley today attacked the Congress for blocking the legislation that it had itself brought in and said 'obstructionist' tendencies and negativism were hurting the country and its economy.

By: | Updated: August 2, 2015 3:38 PM
arun jaitley on gst bill

Arun Jaitley rejected Congress’ dissent notes to the Select Committee report, saying the suggestions being made now were never part of either Mukherjee’s Bill or that of Chidambaram’s proposal. (AP)

Racing against time to get the GST bill cleared from Parliament, Finance Minister Arun Jaitley today attacked the Congress for blocking the legislation that it had itself brought in and said ‘obstructionist’ tendencies and negativism were hurting the country and its economy.

Acknowledging that there may be merit in Congress’ demand for 18 per cent rate of GST, he said the NDA government has “not made any significant modifications” to the bill that the Congress-led UPA government had proposed in 2006-07 Budget, “except to bring a consensus between manufacturing and the consuming states”.

“The state governments belonging to the Congress party have consistently supported the proposal. Is it only out of an obstructionist attitude that the Congress has adopted a negative role?” he asked.

The government needs Parliament to approve the Constitution Amendment Bill in the current monsoon session ending August 13 before half of the 30 states clear it and the new regime is rolled out from April 1, 2016, so that a nationwide Goods and Services Tax (GST) can replace all existing indirect taxes like excise and VAT.

However, Parliament proceedings have been repeatedly getting disrupted over issues like Lalit Modi controversy and the Vyapam scam for the past two weeks.

“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,” Jaitley wrote in a Facebook post titled ‘Dissent or Disruption – The Congress Party’s Position on GST’.

He said the Congress and its leader “may be upset with the government for political reasons. They may be upset with the electorate for the 2014 verdict”.

“The Congress party should accept and seriously introspect after having ruled the country for the longest period of time, that negativism hurts the country. Should its obstructionist tendencies inflict an economic injury on the country?” he wrote.

Giving a point-wise rebuttal on the Congress party’s dissent note to the Select Committee’s report on GST, Jaitley said the rationale of the bill is to simplify the complex indirect tax structure in the country.

“The present system involves multiplicity of taxes, absence of uniform rates of taxation, and the cascading effect of ‘Tax on Tax’. It is also an impediment to the seamless transfer of goods and services across the country,” he said.

The GST Constitution Amendment Bill has been cleared by the Lok Sabha and is waiting for nod of the Rajya Sabha, where the ruling NDA does not have a majority.

The report of the Rajya Sabha Select Committee was tabled in Parliament last month. The Committee had suggested to compensate the states fully for five years for any revenue loss for GST rollout. However, the Congress, the AIADMK and the Left had submitted dissent notes on the same.

Jaitley said the proposal for introduction of GST was first mooted by former FM P Chidambaram in his Budget for 2006-07.

“After detailed deliberations and negotiations in the Empowered Committee of State Finance Ministers, the 115th Constitution Amendment Bill, 2011, was introduced by Pranab Mukherjee, the then Finance Minister,” he said, adding that the Bill was referred to the Parliamentary Standing Committee, which submitted its report in August 2013.

The bill, however, lapsed with dissolution of the Fifteenth Lok Sabha. Thereafter, the NDA government again held negotiations with the Empowered Committee and after an overwhelming consensus, introduced a bill incorporating certain changes which had also been recommended by the Parliamentary Standing Committee.

The bill was approved by the Lok Sabha and when it came to the Upper House, it was referred to a Select Committee which has recommended a five-year compensation to the states which suffer any revenue loss on account of introduction of GST, he said.

Arun Jaitley rejected Congress’ dissent notes to the Select Committee report, saying the suggestions being made now were never part of either Mukherjee’s Bill or that of Chidambaram’s proposal.

Jaitley said the Congress’ suggestion of GST rate not exceeding 18 per cent was not part of the bill from Mukherjee.

The FM added: “The rates of taxation are usually not fixed in the Constitution… The rates have to be recommended by the GST Council depending on factors such as economic conditions, revenue buoyancy etc and incorporated in GST laws.

“There may be some rationale in the rate recommended by the Congress party. However, this decision has to be taken by the GST Council and cannot be part of the Constitution itself. The rates will vary depending on a host of factors.”

On Congress’ demand that the expression ‘supply’ should not apply to goods and services supplied by one unit of a firm to another of the same firm, Jaitley said there was no such proposal in either Mukherjee’s bill or in the proposal approved by Chidambaram.

The FM said the Congress’ proposal that the share of local bodies in the revenue should be part of the proposed Constitution amendment, runs contrary to the 73rd Amendment of the Constitution, which provided for setting up State Finance Commissions with a mandate to make such recommendations.

Also, its proposal that a state or a Union Territory with or without a legislature having a population not exceeding 20 lakh should be given a special status was never Mukherjee’s or Chidambaram’s.

“The Congress wants Goa to be a special category state under GST, but Goa has the highest per capita income in the country,” he said.

On the Congress demand that electricity, tobacco products and alcohol for human consumption should be given the same treatment as petroleum in the Amendment bill, he said this was not a proposal mooted by any of the Congress FMs.

Rejecting the Congress suggestion that voting representation of the states in the GST Council to be increased from two-thirds to three-fourths, he said this would reduce the Centre’s voting power from one-third to one-fourth.

“This is contrary to the decision Chidambaram specifically took on April 30, 2013… In fact, the Congress proposal would mean that if all the states get together and decide that the Centre should have a lower GST rate, they could deplete revenues of the Centre almost completely,” he said.

India, Jaitley added, is a Union of States. “Is it the Congress proposal that the Union should cease to economically survive… The Congress appears to have made this proposal without adequate application of mind,” he said.

Jaitley said the power of deciding the modalities of adjudication and settlement of disputes in the present bill is with GST Council.

“Political issues have to be settled politically and not by judges,” he stressed.

The Congress has asked for deletion of a two-year transient provision which provided for an additional tax of 1 per cent to be credited to the exporting state. “This provision has been added in order to allay the fear of manufacturing states which felt that they would initially lose some revenue. This is based on a unanimous decision of the Empowered Committee to which all Congress-ruled states have agreed,” the FM said.

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  1. Z
    Aug 3, 2015 at 8:33 am
    Sonia brings bad tidings -Sanjay hi died -Indira hi died -Rajiv hi died -All her relatives dead, but Sonia stands as the richest politician and the Indian tax payers keep supporting her. Now she brings bad tidings to the country's progress. It was a bad day when she stepped into Indian political scene.
    1. Amma Nagar
      Aug 2, 2015 at 5:58 pm
      One way to make progress could be that Mr Jaitley can apologize to People of India and Congress that when he was opposition he and his party foolishly opposed the GST and he did not have any concern Indian economy then.
      1. b
        Aug 2, 2015 at 4:01 pm
        Only the CMs of the Congress ruled states can knock some sense in the Congress leaders in Delhi,as they will have to face the people's wrath in the next elections.
        1. F
          Aug 2, 2015 at 6:20 pm
          wrong,,, GST lapsed due to dissolution of Parliament. Had it been that case, the current land bill wouldn't exist. Besides, are you implying that , lest say, your neighbor ate hence you also will do the same thing?...
          1. L
            Aug 3, 2015 at 2:01 pm
            If what Honorable FM is correct, then why cant he convince non-Congress parties in Rajya Sabha and get it ped ? With the support of non-Congress parties it will be easier for the NDA to isolate Congress. Why the NDA is not doing it? what is holding them back? Why blame Congress always? BJP has to come out of mindset of blaming Congress for every ills. Secondly, what is wrong in coming out with new ideas and objections to GST, as NDA has come out with 1% tax revenue to manufacturing states, which was not there earlier. BJP blocked it when they were in opposition because they did not want UPA to claim credit. Now they want to claim credit, although the original author is UPA. They pla politicis, now they are facing the music. At the end country suffers.
            1. N
              Narendra M
              Aug 2, 2015 at 5:21 pm
              What was positive about State governments’ delaying tactics when the UPA government, and particularly then Union Finance Minister Mr. Pranab Mukherjee, were making all efforts to introduce the Goods & Service Tax (GST) regime by 1st April 2015? There was in place an empowered committee of State governments led by Bihar finance Minister but many State governments were simply not keen to introduce GST regime. Even the Gujarat government, then led by our current PM was not very keen about GST. Now that BJP is in power it is in a hurry to have in place GST regime and that is okay. I believe from this experience our politicians should not forget to learn an important lesson which is-never oppose sound reform proposals of the ruling party for political gains. Would they learn this lesson?
              1. N
                Aug 2, 2015 at 5:09 pm
                If one compares 2012 with 2015 , the urgency for GST was equal at both times. Yet some States ruled by BJP held it up in 2012-13, notably Gujarat. In spite of these roadblocks the economy did Ok with 6.9% growth in 2013-14. Even today we'll do maybe 7.5% as things stand. It's difficult to see how the GST has become more urgent, just because the BJP is in power , though it's certainly good to have.
                1. N
                  Narsimha Reddy
                  Aug 2, 2015 at 6:57 pm
                  Please put all those KAHDANNI LOOTARY ITALIAN MAFIA in tihar jail ASAP we need CONGRESS MUKTH BHARATH
                  1. B
                    Aug 2, 2015 at 5:30 pm
                    no excuse first resignations of all tained and corrupted ministers and chief minister then only congress should allow the house to run. Congress has a golden opportunity this time and should take full advantages of the parliament logjam which BJP is entirely responsible , why is BJP shy of taking the resignations from the corrupt and tainted ministers in lalitgat and vypam frauds. all opposition should unite and dont allow b jp to run the parliament first resignations and then debate that is all
                    1. X
                      Aug 2, 2015 at 5:13 pm
                      Let Mr. Modi explain why he blocked GST when he was the CM.
                      1. T
                        t p
                        Aug 2, 2015 at 4:41 pm
                        'obstructionist' tendencies and negativism of the congress hurting the country and its economy. So CMs of the Congress ruled states are right in their regret. " लेकिन पप्पू हे कि मानता नहीं।
                        1. T
                          t p
                          Aug 2, 2015 at 4:38 pm
                          Rightl said: 'obstructionist' tendencies and negativism of the congress , hurting the country and its economy.
                          1. T
                            t p
                            Aug 2, 2015 at 4:53 pm
                            इतनी नकारात्मक राजनीति , कि संसदीय कार्य ही ठप्प हो जाए , ठीक नहीं।
                            1. O
                              Aug 3, 2015 at 7:53 am
                              Sonia hi is a vindictive and malicious woman who cannot accept the drubbing the Congress party received. She and her dud son view as their birth right to rule this country and keep it poor. Cant blame her - she is italian with no emotional connection to India. But what about the other sin the Congress....dont you folks have NO SHAME!
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