Giving the crucial Goods and Services Tax (GST) Bill another impetus, Finance Minister Arun Jaitley will today meet state FMs. The agenda of the meeting is to discuss the proposed amendments to the Bill that is currently stuck in the Rajya Sabha. The GST Bill was originally proposed by the Congress-led UPA government, but the party has been blocking its passage for the past few Parliament sessions on the grounds of amendments that it is seeking. Congress has asked the government to cap the overall GST rate at 18%. It has also been demanding that the government should scrap the one per cent additional tax to compensate manufacturing states.
The Monsoon session of Parliament is widely expected to see the introduction of the GST Bill, with the government trying to get regional parties on board. Arun Jaitley met Bihar chief minister Nitish Kumar over the weekend and is believed to have discussed the GST Bill. Regular meetings with Congress leaders have also taken place to garner support for the important tax reform. Last month also, FM Jaitley met state FMs and had announced that all states will support or accept the proposed GST. Tamil Nadu is the only state that has expressed some reservations, but if reports are to be believed, the government may already have 55% support in Rajya Sabha for GST.
The Cabinet is likely to approve a proposal on Wednesday to drop the 1% additional tax on inter-state sales as proposed in the GST Constitutional Amendment Bill, thereby meeting a key demand of the Congress. The tax had been proposed as manufacturing states like Gujarat and Tamil Nadu were of the opinion that they, having spent money on putting up infrastructure, would lose revenue as GST is a destination-based tax. However, the government will not yield to what it believes is an “unreasonable” demand by the Congress to cap the GST rate at 18% in the Constitution itself, sources have told Financial Express.