GST hopes high at BJP meet

Government likely to offer sweeteners to Congress to make Bill passage easy in the Rajya Sabha

The mood at the Bharatiya Janata Party's Diwali Milan on Saturday was positive on the Goods and Services Tax Bill clearing the Rajya Sabha hurdle in the winter session of Parliament.

Senior Union ministers dropped hints that the government would provide sweeteners to the Congress, the principle opposition party, on its three demands for changes to the Bill (see chart).

On Friday, Prime Minister Narendra Modi, accompanied by Finance Minister Arun Jaitley and Parliamentary Affairs Minister M Venkaiah Naidu, met his predecessor Manmohan Singh and Congress President Sonia Gandhi, purportedly to overcome the impasse over the GST Bill. Senior ministers said Singh had proved helpful in bridging the communication gap between the government and the Congress.
 

Saturday afternoon was overcast but the mood at BJP's Diwali Milan - an annual affair where senior party leaders interact with journalists - at the party headquarters, 11 Ashoka Road, was bright. Sources said to get the Rajya Sabha, where the ruling National Democratic Alliance does not have a majority, clear the GST Bill, the government could reconsider its stance on the three conditions laid down by the Congress.

Congress is willing to have an 18 per cent cap on the GST rate but not include the provision in the Bill - it would be an enabling provision in the rules and regulations, which would be framed once the Bill was passed. The government conceding ground on the other two conditions is likely to get the Congress on board as well.

Another meeting between Congress leaders and the government is likely to take place later next week, after both parties have had time to do their homework. Also, the prime minister will be out of the country, attending the climate change talks in Paris starting November 30 .

The wheels at the Congress camp, too, have started rolling. On Saturday morning, Mallikarjun Kharge, the party's leader in the Lok Sabha, met its Vice-President Rahul Gandhi at his Tughlaq Road residence, to ostensibly discuss "labour issues" as an Indian National Trade Union Congress meeting is scheduled soon.

However, after the meeting Kharge said, "If our concerns (on the GST) are met, a formula is reached, we can move ahead." Sonia Gandhi had already briefed Leader of the Opposition in the Rajya Sabha Ghulam Nabi Azad and his deputy Anand Sharma on Friday.

THE IMPASSE
The three demands of the Congress, their effect and the govt’s response:

CONGRESS DEMAND: 18 per cent cap on GST rate in the Bill itself
EFFECT: Every time the rate is to be changed, Parliament needs to clear it. Then, at least half the states (15, as of now) need to ratify it. Could add to the burden of Centre’s compensation and states’ exchequers
GOVT RESPONSE: The demand is preposterous

CONGRESS DEMAND: Do away with one per cent tax on inter-state commerce
EFFECT: Would take away distortions in GST, but make manufacturing states angry
GOVT RESPONSE: Select committee had diluted the earlier provision by restricting the tax to inter-state sale and not branch transfer

CONGRESS DEMAND: Dispute Resolution Authority
EFFECT: Would have the powers of the GST Council
GOVT RESPONSE: It is against the curtailment of powers of the Centre (one-third of total voting power) in the GST Council
The week-long window before the Bill comes up in the Rajya Sabha ties in with the House schedule to conclude its discussion on the Constitution on Monday. Before the start of the session on November 26, BJP leaders had suggested to the prime minister to approach Sonia Gandhi to reach a consensus on the GST Bill. Modi wanted to know if this strategy would work and his ministers had then approached former prime minister Singh, who, they claim, acted as a consensus builder.

It was after all the United Progressive Alliance government, under Singh, that had drafted the Bill. Sources said the former prime minister was well aware of the Bill's nitty-gritty as well as the limitation of the government in accepting all of Congress' demands. Much of the conversation during the 45-minute meeting took place between Modi and Singh.

Sharma on Saturday said: "The government reaching out to us is a welcome move." He added that the party's top brass would come to a decision together. A source said Rahul Gandhi, who will play a major role, is firm on having a cap on the GST rate. "Much will depend on the government's demeanor in Parliament this week," said a source. The Congress is expected to respond to the government next week.

During his brief speech at the Diwali Milan, Modi said Indian festivals play an important part in social life. "There is no discrimination in the festival of lights. It strengthens values of equality."