GST Bill: The Day After, Government Hints At Rate Higher Than 18 Per Cent
The Rajya Sabha on Wednesday night passed the GST Bill. With this the final call on the Goods and Service Tax rate will be left to the proposed GST Council, however the Centre Thursday clearly indicated that the standard rate is set to be higher than the maximum rate of 18 per cent sought by the Congress party.
Speaking upon the Congress party’s other demand to the government introducing the two upcoming central GST Bills as financial bills, rather than money bills — and thereby bypassing a debate, Finance Minister Arun Jaitley said: “The Constitutional provision in Article 110 and 117 as to what is a money bill and what is a finance bill is absolutely clear. The word used in Article 110 is ‘shall be,’ that is what shall deemed to be a money bill, so I can’t convert a constitutional requirement into my own option. That’s the option that I don’t have.”
While a financial bill has to be debated and voted in both Houses of Parliament, a money bill is debated and voted only in Lok Sabha. Rajya Sabha can only suggest amendments to a money bill, but it is up to the Lok Sabha to accept them or reject them.
Jaitley indicated at a briefing on Thursday, a day after the Rajya Sabha cleared the enabling Constitution Amendment Bill for ushering in the tax reform, that an “unreasonable cap” on the standard rate of tax could burden the Centre with compensation that will have to be paid to states for any potential revenue loss suffered by them. And this could jeopardize the fiscal consolidation roadmap of the Central government.