Former PM Manmohan Singh urged Congress not to push for amendments in GST bills in Rajya Sabha
The Rajya Sabha today passed four GST or Goods and Services Tax bills without amendments setting the stage for the government to launch on July 1, the country's biggest tax reform since Independence. Just before the bills were voted on after an eight-hour debate in the upper house, former Prime Minister Manmohan Singh intervened and asked his party the Congress not to seek changes in them to "maintain consensus and federal agreement."
Without the support of the Congress, which is the largest party in the Rajya Sabha, amendments moved by other opposition parties like the Trinamool Congress and the Left were voted down.
Replying to the debate, Finance Minister Arun Jaitley said GST, which will bring a uniform indirect tax regime in the country, will not lead to inflation as people worry. He said once the new tax regime is implemented, the harassment that businesses face having to deal with multiple authorities will end and India will be have one rate for one commodity throughout the country.
If changes to the bills had been approved by the House today, it would have been more embarrassment than worry for the government, which is in a minority in the Rajya Sabha. Because they are Money Bills, the Rajya Sabha's changes would not have been binding on the Lok Sabha or Lower House to which the bills would then have returned. The Lok Sabha can choose to accept or reject changes in Money Bills.
The Congress stakes claim to the mega tax reform as the party that first initiated it when it was in power at the centre under Dr Manmohan Singh as Prime Minister. The party said during the discussions in parliament that it did not agree with several provisions in four bills passed today. But its major objection, along with other parties, was to the bills being presented as Money Bills, which it, alleges, undermines the Rajya Sabha.
Mr Jaitley said successive governments have contributed towards GST and no one person can take credit for it. This Bill, I have no hesitation in conceding, is a collective property," he said.
The four bills passed today - the Central GST bill, the Integrated GST bill, the Union Territories GST bill and the compensation law - have already been cleared by the Lok Sabha, where the government has a big majority, last week. Now a state GST bill will be presented in state assemblies for their approval.
GST rates will be discussed by the powerful GST Council on May 18-19. The council, made up of state finace ministers and headed by Mr Jaitley, has recommended a four-tier tax structure of 5, 12, 18 and 28 per cent. On top of the highest slab, a cess will be imposed on luxury and demerit goods to compensate states for revenue losses in the first five years after GST is implemented.