Chances of the Constitution being amended in the ongoing winter session of Parliament to pave the way for a nationwide Goods and Services Tax (GST) appeared slim on Tuesday with the Congress party, the support of which is crucial for the tax reform, taking a combative approach in Parliament over the National Herald case.
Congress leaders accused the Modi administration of running a “vendetta” campaign against the Nehru-Gandhi family as the Patiala House Court asked its president Sonia Gandhi and her son Rahul to appear before it on December 19 on a complaint filed by BJP’s Subramanian Swamy alleging cheating and misappropriation of funds. The development has cast clouds over the hopes of the ruling coalition and the Congress coming together to pass by two-third majority the Constitution (122nd Amendment) Bill in the Rajya Sabha, where the NDA is in minority.
“Let them do what they want. I am not going to budge one inch. The same questions I am asking the prime minister (Modi) or the government, I am going to continue asking,” Congress vice-president Rahul Gandhi told reporters.
Minister of state for finance Jayant Sinha said the legislative side (as far as GST is concerned) now looked more difficult. “It is quite distressing that the Rajya Sabha is not working, despite our reaching out to the Opposition.” He said what was happening in the Natinal Herald case was judicial proceedings which the government had nothing to do with.
Modi had on November 27 started discussions with Sonia Gandhi for finding a common ground on three contentious demands made by the Congress regarding GST — capping the tax rate at 18%, removing a 1% origin-based inter-state export tax on goods and having a dispute resolution structure with the proposed GST Council. Congress leaders had then promised to come back for talks after examining the government’s response. However, a consensus now looks unlikely despite the fact that Arvind Subramanian, chief economic advisor in the finance ministry, has recommended last week a standard GST rate of 17-18% for all services and for most of the goods and voted against the 1% extra levy.
“The GST Bill has gone for a sky walk,” said Anand Sharma, the Congress party’s deputy leader in the Rajya Sabha, indicating swift passage of the Bill was unlikely. He added that the Modi dispensation was abusing the organs of the government to suppress the Opposition.
Finance minister Arun Jaitley said the government had no role in the court case, adding that the Gandhis could explain their concerns in court but their party should not disrupt Parliament.
The Subramanian panel also pitched for replacing all extant taxes on inter-state trade with GST and denounced the idea of a 1% additional tax to help “manufacturing states”.
The committee, the principal mandate of which was to define the revenue neutral rate (RNR) for the GST, put it at 15-15.5% with a strong bias for the lower end of that.
Jaitley said that it was extremely important for all parties to come together as the government has expressed its choice of a 15% RNR. “India desperately needs the GST and anybody creating a hurdle in the passing of GST Bill will be doing great damage to the country,” he said.