Even as a firm commitment is still not forthcoming from the Congress, the stage is set for the Rajya Sabha taking up the GST Bill next week as several major parties outside the ruling NDA have pledged support to the crucial tax reform. The empowered committee of state finance ministers, which is slated to meet here on Monday, is likely to finalise the structure of the tax and subsequently, the Union Cabinet will likely vet some changes in the Bill before it is put to vote in the Upper House, where the ruling coalition lacks majority. Finance minister Arun Jaitley has indicated the government would press for the passage of the GST Bill next week.
While the Congress has agreed to a formula put forth by the government during inter-party discussions over the last few days that instead of putting the GST rate cap (18%) in the Constitution, a ceiling could be specified in the GST Acts of the Centre and states, it is still to reveal its mind on the government’s stand that the structure of the proposed GST Council won’t be altered to give more power to states. The government had earlier agreed to drop the plan to have a 1% additional tax during the initial years of GST to help manufacturing states, which fear loss of revenue.
In the RS, whose current strength is 244, NDA has only 72 members. For the Constitution Amendment Bill — aimed at allowing states to tax services and Centre to tax transactions beyond the factory gate and creating the powerful GST Council — to sail through the RS, two-thirds of the members should vote in its favour. With several major non-NDA parties like SP, NCP, CPI(M) etc. inclined to support the Bill along with many independents, the government stands a chance to pass the Bill even without the Congress (60 seats) support. The BSP, which had earlier expressed readiness to support the Bill, may waver with the current backlash in Gujarat over Dalits issue. And the AIADMK has remained wary of GST despite the Centre reaching out to the party several times.