The Congress’s walk-out in response to the government’s attempt to move the Constitution (122nd Amendment) Bill, 2014, the enabling legislation for the goods and services tax, for discussion and passage in the Lok Sabha, seems ill-judged. The Opposition has demanded that the bill be referred to a standing committee first for more scrutiny, in spite of the fact that an earlier version of the bill, which was moved by the Congress and which lapsed after the 15th Lok Sabha was dissolved, had already been sent to a committee. The GST, which has been on the cards for about a decade, is to be rolled out on April 1, 2016. The time for the enabling constitutional amendment is now; it cannot wait much longer. In turn, the BJP, which had itself opposed the Congress legislation, will have to do the hard labour of politics to get the Opposition on board — as in the case of the insurance bill.
Opposition posturing notwithstanding, there is wide political as well as federal consensus behind the constitutional amendment, which only frames the broad contours of the proposed tax regime such as giving the states the power to tax services and the Centre, goods — the nitty gritty is to be worked out later by the GST Council created by the amendment bill. Most of the contentious Centre-state issues — such as which extant taxes are to be subsumed, which goods and services are to be exempted, the formula for the division of the integrated GST, turnover thresholds for taxation, revenue-neutral tax rates as well as the compensation mechanism for the states — are to be worked out later by the council, which will include representatives from all the states. For its part, the Centre has signalled its commitment to roll out the tax reform by laying out a credible roadmap in the budget and also raising the service tax rate.
