GST faces roadblock: Government rules out calling special session of parliament

Arun Jaitley, Union Finance Minister, on GST Bill.
Arun Jaitley, Union Finance Minister, on GST Bill.

With the opposition Congress party mounting stiff challenge, the BJP led NDA government led by Prime Minister Narendra Modi has  decided not to hold a special session of Parliament to pass the constitution amendment bill for rolling out the GST and will recommend to the President to prorogue the Monsoon Session.

Finance Minister Arun Jaitley said, “keeping this political reality in mind, Cabinet Committee on Political Affairs (CCPA) decided to recommend to the President to prorogue Monsoon Session”. The government was keen on a special session to obtain the Parliament’s nod for the constitution amendment bill on the Goods and Services Tax (GST) but opted against it “for the time being” as talks with the Congress did not yield results, he said.

Efforts to reach an agreement on the GST Bill, which it had proposed to roll out from April 1, 2016, would continue, he added. “We will keep trying. We are in contact with all political parties. And nearly all parties except Congress are in favour of this bill. In Lok Sabha, except Congress, all other political parties had voted in favour of the bill. Congress has walked out, they (other parties) had not walked out. If situation changes then cabinet will again reconsider the matter,” he added.

On whether the government will be able to stick to the deadline of April 1, 2016 for rolling out the GST, Jaitley said, “your guess is as good as mine”. The GST bill, which has been passed by the Lok Sabha, got stuck in the political logjam in the Rajya Sabha, where the ruling NDA does not have a majority.

As per the procedure, after approval by the Rajya Sabha, the constitution amendment bill on GST will have to be approved by 50 per cent of the state legislatures. Jaitley said that, once the bill is approved by the Rajya Sabha, other steps would not take much time as the government is ready with supporting legislations, of which one has to be passed by the Centre and two by states.

“Our draft legislations are almost ready. We will require meeting of empowered committee to clear them and they can be passed. We need the IT backbone, and those handling the IT infrastructure inform us they are in position to put it in place by April 1, 2016 comfortably…we are keeping ourself in readiness,” Jaitley said. Accusing Congress of delaying the GST, he said, “the only veto is right to disturb the Rajya Sabha so that the chairman can adjourn it”. He further said that, Congress had raised certain demands which were not there in the GST bill prepared by the UPA’s Finance Minister in 2011.

Jaitley said it was not possible for the government to put a cap of 18 per cent on the GST rate in the constitution bill, as was being suggested by Congress. It is for the proposed GST council to decide the tax rates, he said, adding, “suppose tomorrow states agree and alcohol comes under GST then should medicine and alcohol be taxed at same rate. This wisdom has dawned on Congress party only after it lost power!” the minister said.


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