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Congress conditions for supporting GST an after-thought, says Arun Jaitley

New Delhi : Finance Minister Arun Jaitley on Friday rejected the conditions put forward by Congress for supporting the landmark GST legislation saying these are an “after-thought” and were not a part of the bill that the party had itself introduced.

“I do not think it is very part of prudent politics for any party to put pre-conditions, particularly on a matter which involves a fiscal relationship between the Centre and the states,” Jaitley told reporters here.

He was replying to a question about the three pre-conditions put forth by former Finance Minister P Chidambaram for Congress supporting GST.

“All these three decisions are unanimous decisions of all the states to which the Congress party states are privy. So it is clear that these three pre-conditions are an after thought,” Jaitley said.

Indirect tax reform GST proposes to create an uniform tax rate across the country by subsuming excise, service tax and other local levies. GST is estimated to boost India’s GDP by 1-2%. The government has proposed to introduce the new regime from April 1, 2016.

Due to disruption by opposition Congress, the government could not get the GST Constitution Amendment Bill passed in the Monsoon session of Parliament which ended on Thursday.

Jaitley said the first conditionality of a constitutional cap of 18% on GST rate was not Chidambaram’s proposal in the Bill as approved by him after the Standing Committee recommendation in 2013.

“Nor the then Finance Minister’s (Pranab Mukherjee’s) proposal, when he introduced the bill in 2011 had any 18% cap. So that is clearly an after-thought,” he said.

Jaitley said the rates would be decided depending on the fiscal position and economic situation, and Constitution need not be amended to alter them.

As far as the dispute redressal authority is concerned, the Standing Committee had unanimously recommended that we must not have the dispute redressal mechanism or authority in the Bill, Jaitley said.

“All Congress party members were privy to that report. Chidambaram accepted that report in 2013, and then accepted the formula that disputes should be resolved in the GST Council which has one third central voting power, 2/3 states with a 3/4th majority required for any decision,” Jaitley said.

So both these two conditions are contrary to what its own stand was when he was finance minister, Jaitley said.

The third condition of up to 1% additional tax for inter state movement of goods, was a compromise between the centre and the states, to which Congress party states were privy.

Hinting at a special session to get the long-delayed GST bill passed, senior Union Ministers including Piyush Goyal and Nirmala Sitharaman have earlier in the day said the government is ‘optimistic’ about meeting the rollout target for the uniform nationwide tax regime from April next year.

Power Minister Piyush Goyal said the government will work out alternatives to implement the GST and accused the Congress of “insulting the people of the country” by disrupting the legislative business in the just-concluded Parliament session where GST bill was stalled.

“There are less possibilities of implementing Goods and Service Tax (GST) law by April 2016, but the government will work out alternative ways to ensure people get its benefits,” Goyal said.

Commerce and industry minister Nirmala Sitharaman said she is ‘very optimistic’ about getting the GST and other key bills passed in Parliament despite Congress’ disruption.