Congress leader and former finance minister P Chidambaram spoke on behalf of the party to raise its objections to the Goods and Services Tax (GST) Bill, which was moved in the Rajya Sabha on Wednesday. Welcoming the “friendly tone” of finance minister Arun Jaitley’s introductory speech, Chidambaram hoped the bill will be passed on the basis of logic and not numbers.
Acknowledging that the UPA government attempted to pass the legislature with the support of the Opposition but failed, he said he is “happy” that the NDA government has not been able to either as they have tried to do so without the support of the principal Opposition. “I am happy that there has been a serious engagement between the government and Opposition parties in the last few weeks,” he added. He referred to it as the “Good Sense Triumphs” Bill.
“There is no such thing as a perfect Bill. But when we found there were too many flaws in the Bill, we decided that we cannot support the Bill,” Chidambaram concluded. “Firstly, there are still pieces of clumsy drafting in the Bill. In the present list of amendments, you have made some provisions of what will go into the Consolidated Fund of India. This problem should have been noticed much earlier. Revenue has to go into the Consolidated Fund.”
On the most contentious issue, the tax ceiling, Chidambaram reiterated that the standard rate should not exceed 18%. “The empowered committee is the one which arrived at a 15.5% revenue neutral rate and came to the conclusion that 18% should be the appropriate GST rate. The Congress did not suggest the 18%, it came out of your report” he said. “The worry that we have is creeping taxation. But that is what Parliament is for. Taxation is the exclusive power of the Parliament. It is ultimately Parliament which calls the shots in taxes.”
He expressed happiness at the government’s decision to do away with the additional 1% tax which could be imposed by individual states. “We must avoid multiplicity of taxes. We must be able to capture every transaction. If you give some states power to impose additional one percent tax, it would have led to multiplicity of tax rates.”
P Chidambaram suggested that the discussion be expanded to include members of the Lok Sabha as well, as the economic legislature is vital for the country.
Apart from the Congress’ reservations, the JD(U) has questioned whether the GST will affect price rise. CPI(M) is concerned about the federal structure, and believes there should be flexibility to the states. The BJD expressed apprehension over the Centre’s veto power in the Bill. Tamil Nadu’s ruling party AIADMK expressed complete resistance to the bill, saying it will result in the state losing ₹9,270 crore.
At the start of the Monsoon Session, the House had decided to allocate five hours to discuss the GST Bill. The BJP is eager to implement it by April 2017.