GST bills in RS; Opposition questions how the tax regime is 'ideal'

The Rajya Sabha on Wednesday took up the four bills related to the GST, with the Opposition urging the government to insulate taxpayers from harassment and questioning how the new regime was “ideal” when 40 per cent of the revenue base of the GDP was kept out of its purview.

Initiating a debate on the bills, Deputy Leader of Congress Anand Sharma termed the proposed legislation as “imperfect” saying that 40 per cent of the revenue base of the GDP has been kept out of it.

“When you look at the list of exclusions it is worrisome. All petroleum products, diesel, petrol, aviation turbine fuel, gas has been kept out. It is elementary common sense that that is the biggest multiplier when it comes to the transaction cost or transportation.

“When you have such a heavy list of exclusions how are you going to help in achieving the objective particularly when it comes to bringing down the transaction cost and reducing the burden particularly on the industry,” Sharma questioned.

Sharma sought to know why real estate has been kept out of the GST purview when the government is “fighting illegal transactions and black money”, raising similar concerns on alcohol being out of the ambit of the new indirect tax regime.

He also questioned the government’s preparedness to implement the indirect tax regime and urged for a mechanism to insulate taxpayers from harassment by tax authorities.

“It is important that as you go for implementation, both the Centre and the state governments should create an institutional mechanism which protects or insulates the taxpayers from harassment.”

He said the government should not create multiple windows of tax harassment, search, seizure and arrests which is “already happening”.

“If it leads to that situation, then surely you will not be helping the economy and the industry nor the consumers,” the former Union minister said while speaking on the debate on The Central GST Bill, 2017; The Integrated GST Bill, 2017; The GST (Compensation to States) Bill, 2017; and The Union Territory GST Bill, 2017 which were passed by the Lok Sabha last week.

During the debate, Congress leaders Digvijay Singh and Jairam Ramesh targeted Prime Minister Narendra Modi, saying as the chief minister of Gujarat he had opposed the GST for years, thus causing a big loss to the exchequer.

Ramesh said his party will support the GST bills but will raise some questions.

He said the idea of GST first came when former Prime Minister V P Singh was the Finance Minister in 1986 and the first step to reform was introduction of MODVAT.

“Successive prime ministers deserve as much credit as the present prime minister,” Ramesh said, adding “let’s not make it out as if the current prime minister came and suddenly everything worked to the country’s advantage.”

Stating that Finance Minister Arun Jaitley deserves “one cheer” for what he has accomplished, Ramesh said he will not give two or three cheers to Jaitley because the current FM has two advantages which his predecessors did not have.

“What are these two advantages. Mr Jaitley did not have a cussed obstructionist standing committee to deal with which took 28 months to submit its report. And Mr Jaitley did not have a single-minded obstructionist chief minister with whom Mr Chidambaram and Mr Pranab Mukherjee unfortunately had to deal with”.

Bhupendra Yadav of the Bharatiya Janata Party objected to the word “obstructionist”, saying it is unparliamentary and should be removed from the proceedings.

The Chair said if the word is unparliamentary, it will be removed.

Ramesh then said, “He was surely obstructionist but since you are objecting (to the usage of the word), you may treat it as uncooperative.”

Sharma urged the finance minister and the GST Council to keep most of the goods, which are used by the common man, at the tax rate of 5 per cent.

He said the government should “resist the temptation” to bring maximum goods and services under the rate of 18 per cent, cautioning that such a move will be inflationary.

A moderate rate would facilitate compliance, he said.

“We were not lucky, nor the Prime Minister Manmohan Singh then, to make the Opposition understand the benefits of GST when it was referred to by none other than the Prime Minister (Modi) who is seeing all virtues and benefits today, but he was the single most agitator against the GST saying it will destroy the federal spirit, it is against the Constitution.

“We have no quarrel that if there is more wisdom that has come in, perhaps all of you would have said that is in the larger interest of the country,” Sharma said.

Participating in the debate, Bhupendra Yadav of the BJP expressed hope on petroleum products being included in the GST going forward if a consensus was evolved on the issue.

Naresh Agarwal of the Samajwadi Party sought to know how the local bodies like municipal corporations will be compensated for loss of revenue incurred on account of the GST’s implementation.

Derek O’Brien of the Trinamool Congress said, the concept of GST was introduced by the former Prime Minister Atal Bihari Vajpayee in 2000 in the Parliament “but people (then) were more familiar with KBC (Kaun Bangega Crorepati).”

He said the concept has “evolved over the last 17 years and is something we can be proud of.”

About the politics over last two decades on the tax reform, he said, “In GST, ‘G’ stands for ‘Go’. When in the government, go for it and when in opposition go slow over it. Be it the JDU, SP, BSP, AIADMK or NCP, everybody has done the same thing.”

Derek O’Brien quoted the ministers of the BJP-ruled states like Gujarat and Madhya Pradesh, who had categorically opposed the GST earlier.

Attacking the BJP, he said, “When the party gives lecture on being a responsible opposition, it is not digestible.”

Citing an instance, he said Parliament was disrupted for 22 days over 2G scam and 423 working hours were lost.

He also talked about various views on whether or not the recommendations made by GST Council should come to Parliament “as some say that in that case you are taking away federal structure because GST Council is a council of states”.

He said that “people still talk about KBC but now it stands for ‘Kab Banega Consensus”.