Nomura, the Japanese financial services major, had indicated that there is a 60% probability of the GST bill getting passed in the monsoon session. But the recent developments that have taken place at a rapid pace in the last week seem to point out to a much higher chance of the passage of GST bill in the upper house of the Parliament. The ruling government is attacking all fronts with its guns blazing. It is leaving no stone unturned to ensure that they achieve the goal this time.
On one side the cabinet chaired by the prime Minister took just one day to agree to the consortium of state finance Ministers’ demand to do away with the 1 per cent tax on inter-state transactions. Thus, it garnered the support of the regional parties in the states which are in power. They also have members in the Rajya Sabha and their vote could be detrimental in the voting for the 122nd constitutional amendment bill. The action has also ensured that a key demand of the Congress party for GST bill is also met.
On the other side, the BJP government decided to take the bull by the horns. It engaged the Congress in no less than seven rounds of discussion on its other demands on the GST bill. The last of these discussions lasted for nearly an hour. The results are very encouraging. The Congress has given up its demand for the Constitutional cap of 18% on the GST. It has agreed for legal ring-fencing of the GST rates which will not find a mention in the Constitution but in the CGST, SGST, and IGST.
Sensing the mood change of the Congress the ruling party quickly accepted their third major demand for a dispute resolution mechanism headed by a High Court judge, and not by the GST council. The Congress had rightly pointed out that there are going to be sweeping changes in the indirect taxation system and there will be disputes. The wording in the Constitution for the dispute redressal was weak and vague and they wanted it changed. The change in the wording is just a formality and the ruling party has just to come back with the re-wording.
The Deputy Leader of the Opposition in the Rajya Sabha Anand Sharma, in an exclusive chat with “The Hindu”, has indicated that barring an unexpected hitch, the GST bill is a done deal and will clear the Upper House in the next week. The statement emerged after the end of weeks of parleys between the ruling party and Congress. If one has to go by the wording of a cabinet minister that the talks between the government and Congress “were almost through”, it points to the immense likelihood that the GST will see the light of the day within this week.
The Parliament Monsoon session ends on August 12, 2016, and the government still have two weeks to meet its target. It will do well to achieve the goal within this week and keep the last week spare for any unprecedented developments.