Winter Session: Arun Jaitley reaches out to Opposition on GST

Willing to talk changes but cautions against some Cong suggestions: ‘flawed architecture can damage’.

Written by Aanchal Magazine | New Delhi | Updated: November 25, 2015 5:17 am
Parliament, Winter session, BJP government, Arun Jaitley, Narendra modi government, jaitely on GST, GST, Parliament session, indian express Finance minister Arun Jaitley.

Two days before the start of the winter session of Parliament, Union Finance Minister Arun Jaitley expressed the government’s willingness to discuss with the Congress-led opposition the possibility of making changes to the Goods and Services Tax (GST) bill in a clear bid to break the stalemate on the proposed tax reform.

Speaking at an Assocham event in New Delhi Tuesday, Jaitley, however, emphasised that some of the suggestions made by the Congress were “not in the larger interest of the GST structure” and warned that a GST regime with a “flawed architecture” could have the potential to “actually damage the system much more than it can benefit”.

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“We are reaching out to them, we are willing to discuss with them because some of these suggestions may not necessarily be in the larger interest of the GST structure,” Jaitley said.

The GST, which will subsume more than a dozen state-level taxes to create a unified national market for goods and services, is to be implemented from April 1, 2016. A crucial Constitution Amendment Bill for enabling the rollout of the new tax regime, however, could not go through Rajya Sabha in the last session of Parliament due to opposition from the Congress.

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Jaitley’s comments came as Prime Minister Narendra Modi reaffirmed his government’s commitment to rolling out the GST among the slew of reform measures being pursued by the Centre.

Speaking at the India-Singapore Economic Convention in Singapore, Modi was quoted by PTI as saying: “We are hopeful to roll out the GST regime in 2016.”

ALSO READ: Winter Session: Government braces for Opposition offensive 

Echoing this view, Jaitley underscored the point that those stalling reforms should realise that the space for obsolete thinking is now shrinking and those who support reforms are much bigger than those who obstruct.

“The wisdom which dawned on my friends in the Congress party had not dawned on them when Pranab Mukherjee (when he was Finance Minister)

introduced the GST. It did not dawn on them when Mr P Chidambaram accepted the standing committee recommendations. But to come out with the preposterous suggestion that tariff must be mentioned in the Constitution document so that in a given exigency, if tariff has to be altered, you need a two-third majority in both houses of Parliament and has to go to each of the states,” he said.

Jaitley said it would be “extremely unfair” to the country “if we try to impose in the name of political compromise, a GST with a defective architecture”.
“And when tariff rate has to be mentioned in the Constitution itself, (then it) is a flawed architecture… Because the GST with flawed architecture can actually damage the system much more than it can benefit,” he said.

The Congress had stalled passage of the GST bill in the last session of Parliament over its demand that a revenue-neutral rate not higher than 18 per cent be mentioned in the Constitution Amendment bill.

ALSO READ: Winter session: The business of Parliament

Stating that the mention of the tariff rate in the Constitution amendment itself was tantamount to a “flawed architecture,” Jaitley said this wasn’t there in Pranab Mukherjee’s as well as Chidambaram’s bill. He also pointed to faults in the dispute resolution mechanism suggested by the Congress, which has pitched for a clear dispute-resolution mechanism to resolve disagreements between the states and the Centre as also 100 per cent compensation to states for revenue loss for the first five years.

“Two suggestions have emerged. The first is make the Centre one-fourth (in the dispute-resolution body) And if Centre becomes one-fourth, states become three-fourth (and they) can decide on India’s taxation policy. So, India as a union of state ceases to exist,” Jaitley said.

He said the other suggestion is to create a forum where judges will decide. “Now in India, there is separation of powers between the executive and the judiciary… It’s already being diluted with a large part of legislative and executive power going away… taxation is one of the very few powers that Parliament has. That in the world’s biggest democracy, the power of taxation must also go to court,” he said, in a reference to the flaws in the opposition’s demands.

“And once we are going in for such reforms, this reform takes place once in decades. The party having ruled India for almost over fifty years, to make a suggestion of this kind, I think they will probably have to revisit some of these suggestions. I have no difficulty in discussing these with them but the suggestions must never lead to a GST with a flawed architecture,” he said.

The April 1 deadline for a nationwide rollout of the GST — touted as the biggest tax reform in the country post independence — is unlikely to be met unless the Parliament passes the bill in the winter session spanning November 26 to December 23. Once the bill is passed, more than half of the states have to ratify it before Parliament passes another enabling bill to implement the GST.

The Congress has raised its opposition to a proposal that accords states the powers to levy an additional 1 per cent tax on supply of goods over and above GST rate. It has also asked for tobacco and petroleum products to be subsumed within the GST regime.

On the government’s move towards phasing out corporate tax exemptions, Jaitley said: “We have already notified the first slot. Obviously when you bring down the tax rate from 33 per cent down to 25 per cent, some exemptions will have to go and too many of these exemptions eventually make the tax policy of India a rent-seeking exercise. This cannot continue indefinitely in an economy which aspires to be a global leader.”

He also said that the commercial court law and arbitration law for early disposal of all commercial disputes are all part of the agenda to make business easier. “We will try and introduce some of the legislations in the coming session of Parliament itself”.

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  1. U
    US NRI
    Nov 24, 2015 at 11:18 pm
    Buckle up! Biggest fanfare of Indian democracy will be hitting the screens. Winter session. These sessions should also be overtaken by judiciary or a panel of judges. No more speaker in rajyasabha. If elected members can't come to conclusion, voters would like an alternative system to p bills. Mandate doesn't mean anything. Parliamentary circus can't go on anymore. For the past 67 years very few legislations have been introduced in the best interest of nation.
    Reply
    1. A
      Arun
      Nov 25, 2015 at 5:12 am
      "WE DO NOT HAVE APPEE FOR MORE REFORMS". Who's quote is this ? This is the quote of Arun Jaitley in 2013, when UPA wanted to p the GST Bill.
      Reply
      1. A
        Arun
        Nov 25, 2015 at 5:17 am
        CONSUTION is permanent until it is amended with two third majority in Parliament. After that it has to be approved by the PRESIDENT of INdia. Amending Consution is NOT A JOKE. It is a very serious issue.
        Reply
        1. B
          Balraj Saigal
          Nov 25, 2015 at 1:25 am
          I don't think, Mr.Jaitley speaking would help; why can't the PM speaks to opposition directly? Is the opposition untouchable?
          Reply
          1. K
            Karunakaran
            Nov 25, 2015 at 12:29 am
            GST can have terrible consequences to the states. The states manage many taxes at present. But once the GST kicks in, the states are completely at the mercy of the Centre. That is almost like saying, the sons are having their income at present, and they are in control of it. But they must hand it all over to their father, and then, if they need even Rs 10, they must beg the father. Eventhough it may make sense to the businesses, the w process becomes extremely ridiculous given the complications of India's bureucracy. So, the states must reject GST by all means, until the centre has entered into clear contract with the states. So, it is not a simple matter of smiling and reaching out to the opposition by the rogues running the Centre's show. The opposition must reject any talk on GST until the terms with the states are rock-solid.
            Reply
            1. K
              Karunakaran
              Nov 25, 2015 at 2:47 am
              With the horrendous defeat in the Bihar election for the BJP/NDA, the mann-key man has basically lost all his chances to push through anything much in the parliament that can affect the states. The states have their own responsibilities. The Centre has little or no say in such matters. That is how India's political system has been constructed. The mann-key man believed that he could bulldoze his way through everything. But he has utterly failed. It is time the mann-key man and his equally little-educated appointees called Cabinet Ministers just quietly disappear from the Central government before further humiliations. They just don't know how to manage a country like India. What India needs is educated people to run the country.
              Reply
              1. T
                T DUTTA
                Nov 25, 2015 at 6:17 am
                ALL INTOLEARNCE ARE NOT BAD------INTOLERANCE OF TERRORISM IS NECESSARY---INTOLEARNCE OF FRAUDSTARS AND SCAMSTARS IS NECESSARY--IF SOMEONE SOMEWHERE TALKS ABOUT INTOLEARANCE
                Reply
                1. J
                  JH
                  Nov 24, 2015 at 10:56 pm
                  During elections, Modiji told people of India that don't look at the BJP candidate, look at me, and vote for BJP. I will bring acche din....Modiji, isn't it your responsibility, now, to reprimand the trouble makers in your party, who are creating an atmosphere of intolerance and are bullying, insulting and abusing the minorities and other law abiding citizens of the country....Forget acche din, minorities are living in fear, like never before. Modiji should start a campaign to reach out to the people and understand them. Presently, his party men are doing exact opposite.
                  Reply
                  1. K
                    kulaputra kulaputra
                    Nov 25, 2015 at 12:51 am
                    be honest and do the right things is what I am conveying to politicians
                    Reply
                    1. M
                      madhavrao patil
                      Nov 25, 2015 at 10:15 am
                      First there is a need to stop threat to unity nation then parliament discuss on any economical issue. At present unity of nation is most important for us. Without solving the threat to the nation unity then there is no need to talk on any other issue. because nations unity is above all. Modi is showing sympathy toward those are involved to destroy unity of a nation. How can allow Mr Modi to run parallel un official government carried by RSS headed by Mohan Bhagawat.
                      Reply
                      1. M
                        M
                        Nov 25, 2015 at 5:34 pm
                        Its better to let out the three objections which will enable people who understands whether its a NEGATIVE FROM CONGRESS AND SUPPORTING PARTIES! Also open windows for those for public to interact! WASTING OF PRECIOUS PARLIAMENT TIME IS CRIME!
                        Reply
                        1. N
                          Narendra M
                          Nov 25, 2015 at 3:32 am
                          (1) It is obvious that the Union Finance Minister has still not reconciled to the fact that without cooperation of all political parties, legislations like Goods & Service Tax (GST) or Land Acquisition Amendment bill cannot be ped in the Rajya Sabha. Considering current strength of NDA in Rajya Sabha Parliament it is the duty of the ruling NDA to solicit cooperation and it is here that give-and-take approach is vital. (2)Our political leadership must realise that no government can function effectively without positive atude of all parties towards economic reforms. (3) Here, I also wish to say that it is necessary that widespread discussions on introduction of GST regime are held among all sections of our society, throughout the country before the final draft of bill is placed before both houses of the Parliament. There are many sections of our society who are still not aware of provisions of the proposed GST act and what kind of impact GST levy will have on prices of goods of daily consumption. (3) I suppose, if dailies like HT and other media, make special efforts to educate the public about implications of the proposed GST regime, it will be a very good service to people at large.
                          Reply
                          1. P
                            pintu
                            Nov 25, 2015 at 4:33 pm
                            Legament sargri
                            Reply
                            1. H
                              Honest citizen
                              Nov 25, 2015 at 7:22 am
                              In short GST will be only a non starter, Perhaps that is what Jaitley ment.
                              Reply
                              1. H
                                Honest citizen
                                Nov 25, 2015 at 7:20 am
                                In short intolerance towards Congress (I)
                                Reply
                                1. H
                                  Honest citizen
                                  Nov 25, 2015 at 7:18 am
                                  Only Begging bowl is missing. Poor BJP.
                                  Reply
                                  1. S
                                    Sathish
                                    Nov 25, 2015 at 6:17 am
                                    BJPee, con-gress et al are puppets of globalist/imperialist asuras.
                                    Reply
                                    1. S
                                      Sathish
                                      Nov 25, 2015 at 4:07 am
                                      Deception by globalist/imperialist asuras continues using the mask of BJPee, con-gress and other sold-outs.
                                      Reply
                                      1. S
                                        Sathish
                                        Nov 25, 2015 at 4:09 am
                                        Only the mask has been changed. Program of drawing blood from aam admi continues using the deception of democracy setup by imperialist/globalist asuras. Dumb aam admi is happily digging his own grave!!
                                        Reply
                                        1. X
                                          xyz
                                          Nov 25, 2015 at 1:46 am
                                          You mean Mr. Jaitley that you did not reach out to the opposition till now about GST? Funny.
                                          Reply
                                          1. T
                                            Taylor
                                            Nov 25, 2015 at 6:19 am
                                            Today reaching out to UPA to implement their Policy/Reform ! What a pity ?
                                            Reply
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