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Jaitley addresses most of Opposition's concerns. Will GST Bill pass now?

Catch Team | Updated on: 28 July 2016, 22:43 IST

In what could be a major victory for the Narendra Modi government, the contentious Goods and Services Tax Bill is likely to be tabled in the Rajya Sabha on Monday or Tuesday. Several reports suggest the government has managed to get the opposition on board and the likelihood of the bill going through is all but a certainty.

Now that the government has given in to demands of the opposition parties on GST, especially Congress, the year-long impasse is likely to be over soon.

Through this week, Finance Minister Arun Jaitley met with various state finance ministers and secured their support on GST. On Thursday, Jaitley held talks with representatives of political parties to iron out the remaining differences. At these meetings, leaders of the Congress, BJD, TMC, SP and the Left raised concerns about protecting the interests of states. They are waiting to see the final draft of the bill before giving their consent.

Also Read: Here's everything you need to know about GST Bill

"We will wait and watch what proposal the Centre comes up with to protect states," said D Raja of the CPI. The Congress leadership is optimistic about the fate of the bill as well, calling the talks with the government as a "step in the right direction".

Congress' GST demands: cap of 18% on tax rate, no 1% entry levy, statutory body for dispute redressal

From the Congress, Jaitley met Ghulam Nabi Azad, P Chidambaram and Anand Sharma to discuss provisions of the bill that the Congress has raised objections to. Sources said another round of meetings with senior Congress leaders would follow soon.

Sticking points

Still, confusion prevails over capping - Constitutionally no less - the rate of GST at 18%. The Congress is bargaining hard for this key demand to be met. Among other demands, it has asked for the 1% entry tax to be scrapped and sought an independent redressal mechanism with statutory status unlike the proposed GST council to resolve disputes with states.

The Congress has entrusted to former finance minister Chidambaram the task to negotiate with the government on various provisions the party feels should be part of the legislation. To examine other crucial bills tabled in Parliament, the party has formed a a five-member panel of Chidambaram, Anand Sharma, Jairam Ramesh, KV Thomas and Rajiv Satav.

The GST Bill was passed by the Lok Sabha in May 2015, but absence of political consensus in the Rajya Sabha, where the BJP is in a minority, has stalled the reform that will usher in a uniform tax regime across India by replacing a slew of taxes.

We'll wait for the proposal the Centre comes up with to protect the interests of states: D Raja, CPI

On Wednesday, the Modi cabinet approved two key changes to the bill to address the concerns of regional parties and the Congress. This includes a guarantee to fully compensate states for any revenue loss for five years. The latter in particular was a major sticking point with the regional parties.

If the Congress comes on board, the Modi government would be left to face opposition from only the AIADMK and the BSP, which are not in a position to stall the bill. In the 243-member Rajya Sabha, 163 votes are needed to pass a constitutional amendment. The NDA has 71 votes and if the Congress lends its support, the ruling dispensation should have the required numbers. In fact, GST cannot be rolled out meaningfully without the Congress' support, not least because every state has to pass the bill in their respective assemblies after it's cleared by the Parliament, and the Congress rules seven states.

Also Read: Failed tea party: why Govt's been advised to go against promises made on GST

First published: 28 July 2016, 22:43 IST