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Barely two days before the start of the winter session of Parliament, Finance Minister Arun Jaitley said the government was willing to reach out to the Congress over the goods and services tax (GST) but counselled the party to reconsider some of its suggestions as they can “damage” the new indirect taxation system.
Speaking at the annual day function of Assocham in New Delhi on Tuesday, Jaitley termed “preposterous” the Congress’ suggestion that tariff must be mentioned in the Constitution amendment Bill. “It did not dawn on them when (the then finance minister) P Chidambaram accepted the Standing Committee recommendations,” Jaitley said, adding it would be “extremely unfair” to the country “if we try to impose in the name of political compromise, a GST with a defective architecture”.
“And when tariff rate has to be mentioned in the Constitution itself, (then it) is a flawed architecture... Because the GST with flawed architecture can actually damage the system much more than it can benefit,” he said, adding this wasn’t there in Pranab Mukherjee’s as well as Chidambaram’s Bill.
Finding fault with the dispute resolution mechanism suggested by the Congress, Jaitley said, “Two suggestions have emerged. The first is to make the Centre one-fourth (in the dispute resolution body). If the Centre becomes one-fourth, states become three-fourth (and they) can decide on India’s taxation policy. So, India as a union of state ceases to exist.”
Referring to another Congress suggestion to create a forum where judges will decide these issues, Jaitley said taxation was one of the very few powers that Parliament has and the proposal would result in that power also shifting to courts in the world’s biggest democracy.
But, Jaitley’s concerns are unlikely to cut much ice with the Congress, with leaders saying these were “bonafide concerns” and not political or partisan in any way. They reiterated that the Congress had never been opposed to GST but the government’s drafting of the Constitution amendment Bill diluted the essence and the objective that were envisaged with ushering in this landmark tax reform.
According to senior parliamentary party strategists, the Congress was waiting for the government to respond to the issues raised by it before formulating its next step.
The party said the government had not reached out to their leaders formally on discussing the GST.
Jaitley’s hard stand on the Congress concerns comes even as his party hopes that its outreach to the Congress to support the GST Constitution Amendment Bill will bear fruit, at least by the fag end of the session that ends on December 23. Minister of State for Parliamentary Affairs Mukhtar Abbas Naqvi, who also attended the meeting with senior ministers, said the government’s agenda was to run the two Houses smoothly and get the Bills passed by reaching out to the Opposition.
Naqvi claimed senior ministers Rajnath Singh, Jaitley and Venkaiah Naidu, and he himself, have spoken to leaders of various Opposition parties, seeking their cooperation.
“We are hopeful to get Congress support for the passage of important reform Bills, which are in national interest,” he said. A total of 38 Bills, including some finance Bills, are awaiting parliamentary approval. The government had expressed its willingness to look at the concerns of the Congress over GST but the specifics were yet to be spelt out.
The government has called an all-party meeting on Wednesday at 11 am. BJP parliamentary party executive and NDA constituents will meet later at the Prime Minister’s residence, followed by an all-party meeting called by the Speaker at 7 pm.
