GST Bill faces Opposition heat in Lok Sabha

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April 25, 2015 12:41 AM

The Bill on GST, considered the biggest tax reform after 1947, was introduced in the Lok Sabha last Dec...

The Bill to amend the Constitution to pave the way for a Goods and Services Tax (GST) was moved in the Lok Sabha on Friday for consideration amid stiff resistance from several opposition parties, including the Congress, which first proposed the indirect tax reform. Finance minister Arun Jaitley said GST would provide a “win-win” for the Centre and states. The tax reform is expected to add 1-2 percentage point to the economic growth rate.

Members of the Congress, led by Sonia Gandhi, along with those of TMC, Left and NCP, staged a walkout after their plea for referring the Constitution amendment Bill to the standing committee was not accepted. AIADMK and BJD also opposed its consideration but did not walk out.

Seeking the support of the Congress before its members walked out, Jaitley said, “Nobody has the monopoly in trying to stop the growth of this country. UPA must start supporting legislations which it brought in. This is a kind of contradiction I am not able to understand.”

The bill on GST, considered the biggest tax reform after 1947, was introduced in the Lok Sabha in December last year. A single rate of GST will replace central excise, state VAT, entertainment tax, octroi, entry tax, luxury tax and purchase tax on goods and services to ensure seamless transfer of goods and services.

While liquor has been completely kept out of the GST, petroleum products like petrol and diesel will be part of the new regime from a date to be decided at a future date by the GST Council, which will have two-third of its members from states.

The consideration of the Bill was also opposed by AIADMK, whose leader and deputy Speaker M Thambidurai contended that it should be scrutinised by the standing committee as his state Tamil Nadu would stand to lose to the tune of Rs 16,000 crore. Jaitley said, “You will not lose even one rupee”.

The Opposition members, which alleged that the government was “bull-dozing” and bringing the bill in a “hush hush” manner, wanted more time to study the “new” legislation and meanwhile finish the financial business. The Bill was earlier vetted by the standing committee but the Modi government made some changes to it to give more comfort to states fearing loss of tax freedom, including guaranteed compensation for any revenue loss.

After hour-long wrangling over procedures between the ruling and Opposition sides, the Bill was taken up when Speaker Sumitra Mahajan ruled that it is an important legislation on which the finance minister can make introductory comments and a discussion can be taken up at a later date.

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