With the ruling BJP and the Opposition Congress working to narrow differences for passage of the GST Bill in the Rajya Sabha, the legislation may be taken up in the House next week. Sources in the Congress said that internal discussions within the party is over and it will be conveyed to the ruling BJP for further “negotiations and consideration”.
A committee headed by Chief Economic Advisor Arvind Subramanian will submit a report to look into possible tax rates under GST on Friday. The report comes in the backdrop of Congress demand that GST rate be incorporated in the Bill.
Former PM Manmohan Singh was in favour of incorporating a GST rate in the Bill. Finance Ministry sources suggested that the Government may also yield on doing away with additional one per cent inter-State manufacturing tax.
“Internal discussions were fruitful, we may now not block the GST. My fear is, however, the Government will have to work hard on developing infrastructure and mechanism if they wish to implement in the new fiscal,” said a top Congress leader requesting anonymity.
Hopes were raised for the GST Bill following a meeting between Prime Minister Narendra Modi, former PM Manmohan Singh and Congress president Sonia Gandhi last week in which both the parties agreed to resort to communication in this regard after internal party discussions.
Sonia and Manmohan had conveyed the Congress’ three key demands, scrapping one per cent additional tax on inter-State sale of goods, a cap of 18 per cent on GST rate through a Constitutional amendment and an independent dispute resolution mechanism for GST. Sources in the Congress said though the party was keen to ensure the passage of the GST Bill, it would continue to convince the Government to take steps to meet its demands.
Subramanian’s report might recommended concessional, lower, standard and higher GST rates. The committee might recommend higher taxes on cigarettes, luxury cars and beverages. Precious metals, on the other hand, may be taxed at a concessional GST rate.
Essential goods and services may also be taxed at a lower GST rate. As far as the passage of the Bill is concerned, the Modi Government is also leaning on Bihar chief minister Nitish Kumar to garner support. Kumar has spoken to top BJP leaders on the GST Bill.