The government has decided to go ahead with the Goods and Services Tax (GST) bill in the Rajya Sabha despite strong opposition by the Congress and its vice-president Rahul Gandhi.
This was stated here by Finance Minister Arun Jaitley during an interaction with a group of journalists following a presentation by Commerce and Industry Minister Nirmala Sitharaman on the National Democratic Alliance’s achievements in the two years that it has been in office at the Centre.
The event, organised by the Bharatiya Janata Party, fielded its top ministers and party president Amit Shah to talk to invited editors and senior journalists from newspapers, magazines and news agencies.
The other ministers who interacted with the journalists in various groups included Defence Minister Manohar Parrikar, Urban Development Minister Venkaiah Naidu and Railway Minister Suresh Prabhu.
The presentation by Sitharaman took up several of the schemes and policy changes that have been brought in by the government. Although she said she would not go through all the details and try and keep the explanations short, by the end of it all the somnolence of the event had started to affect the ministers sitting on the dais as well as the audience.
Jaitley said the government would expect to pass the Constitution amendment bill on GST which would replace taxes at the Centre and the states, simplifying both collection and compliance, while easing the burden on companies regarding the multiplicity of levies.
The finance minister said that almost all the parties supported the bill, except the Congress, which had taken an unreasonable stand. He said the contentious issue on the bill was still the 18 percent cap that the Congress wanted imposed within the bill.
“How can any party take the position that a cap on tax should be placed in such an amendment,” he said, asking if tomorrow there was a drought in ten states and the cCentre wanted to impose a higher GST for a temporary period, would it be able to do it if it has to amend the Constitution?
Jaitley said he was willing to look at a cap in the rules regarding the law, but raised the issue that it was no one’s position that a luxury bag like that of Luis Vuiton should also be taxed at the same rate as flip-flop slippers worn by the common man.
He said there was no ideological issue in this and that almost all chief ministers, including those belonging to the Congress, were in favour of the law.
Jaitley said he had met Rahul Gandhi and Sonia Gandhi on the issue, as also almost all the senior leaders of the party, except P. Chidambaran, former finance minister. “I don’t understand their opposition,” he said.
Asked if they would have the numbers to pass the constitutional amendment in the upper house, Jaitley said, “we will see,” adding that the govenrment was determined to see it through in the next session of Parliament.
The finance minister said once it was passed by parliament, there would be time to have it approved by at least two-thirds of the states, as required for a constitutional amendment of this nature, before going ahead with its implementation from April next year.
Jaitley, who spent about half an hour discussing various issues with the journalists in an informal setting over high tea — as did the other ministers and the party president — said it was likely that both ruling AIADMK in Tamil Nadu and the Congress-ally DMK may support the bill, either directly or indirectly by walking out and thus reducing the numbers in the house required to see the amendment through.
Talking on a possible second term for Reserve Bank of India Governor Raghuram Rajan, the finance minister generally parried questions, just stating that these things take time and agreed that detailed discussions were required before a final decision would be arrived at. Rajan’s term ends in September.
Jaitley said the rquirement for 30 per cent local content for manufacturing of foreign products would continue since this had been done to support local companies and employment.
The question came up in the context of Apple CEO Tim Cook’s visit to India last week where he had apparently raised this issue with the government. Cook met Prime Minister Narendra Modi and discussed possibility of manufacturing Apple products in India.