The Centre on Friday rejected the pre-conditions set by the Congress for backing the long-delayed Goods and Services Tax Bill in Parliament. Finance Minister Arun Jaitley dubbed these demands “afterthoughts” which were not part of the proposed legislation which the party had itself introduced.
Former Finance Minister P Chidambaram had on Thursday said if the Government addresses three of its fundamental concerns, namely, maximum Goods and Services Tax (GST) rate should not cross 18 per cent, no additional one per cent tax and setting up of a grievance redress mechanism, then the Congress could consider supporting its passage.
Blaming the Congress for the continuous disruptions in Parliament due to which the major indirect tax reform measure in the form of GST could not be passed in the just-concluded Monsoon Session, the NDA Government launched a nationwide campaign to ‘expose’ the main Opposition party.
Senior Union Ministers held Press conferences in different cities highlighting the Congress’ role in the complete washout of the Monsoon Session and stalling key reform initiatives, especially the GST.
“All the three decisions (on issues raked up by Chidambaram) are unanimous decisions of all the States to which the Congress-ruled States are privy. So it’s clear that these three preconditions are an afterthought. I do not think it is very prudent politics for any party to put preconditions, particularly on a matter which involves a fiscal relationship between the Centre and the States,” Jaitley told reporters here in response to a question about the Congress’ preconditions supporting GST.
On Congress’ demands on the issue, Jaitley said the first condition of a Constitutional cap of 18 per cent on GST rate was not Chidambaram’s proposal in the Bill as approved by him after the Standing Committee recommendation in 2013.
“Nor did the then Finance Minister’s (Pranab Mukherjee’s) proposal, when he introduced the Bill in 2011, have any 18 per cent cap. So that is clearly an afterthought,” he said.
The Finance Minister said the rates would be decided as per the fiscal position and economic situation and the Constitution need not be amended for that.
On the Congress’ demand for a dispute redressal authority, the Standing Committee had unanimously recommended that we must not have the dispute redressal mechanism or authority in the Bill, Jaitley said.
“All Congress party members were privy to that report. Chidambaram accepted that report in 2013, and then accepted the formula that disputes should be resolved in the GST Council which is one-third central voting power, two-third States with three-fourth majority required for any decision,” Jaitley said.
So both these conditions are contrary to what its own stand was when he was Finance Minister, he added.
The third condition of up to one per cent additional tax for inter-State movement of goods was a compromise between the Centre and the States, to which Congress-ruled States were privy.