Will reach out to Congress on GST Bill: Jaitley

Keen on getting the much delayed Goods and Services Tax Bill approved by Parliament in second half of the Budget Session beginning next month, Finance Minister Arun Jaitley has said he will reach out to the Congress again to persuade it to support the legislation.

"Left to myself, I will continue till the last moment to persuade the Congress," he told PTI in an interview.  

The Goods and Services Tax Bill was passed by the Lok Sabha in May and is pending ratification by the Rajya Sabha or Upper House, where the ruling NDA does not have a majority.

Congress is opposing the bill in current form and demanding that a cap on GST rate be included in the Constitution Amendment Bill.

"I am in agreement with them that the taxation rate must be reasonable. I also agree with the spirit of suggestion that it should not go beyond 18 per cent. I have no difficulty with that," Jaitley said.

But the tax rate cannot be prescribed in the Constitution Amendment Bill, he said. "There is only a difficulty about prescribing tax in the Constitution because you never know unforeseen emergencies.

“Therefore, the Congress will have to see the reasonableness of this particular view."

The GST Bill, India's biggest indirect tax reform since independence, seeks to replace a slew of central and state levies, transforming the nation of 1.3 billion people into a customs union.

After it is approved by the Rajya Sabha, the legislation needs to be ratified by half of the 29 states so as to roll out GST possibly by October 1.

Asked if the government would reach out to Congress again, the Finance Minister said, "We discuss with them frequently. I will again be speaking to them."

The government, Jaitley said, had the numbers in Rajya Sabha to get the Bill through after considering support of non-National Democratic Alliance parties like Trinamool Congress and Biju Janata Dal for the legislation.

"Numbers are in our favour but my preference is to do it with consensus because after all it is states which also have to implement this," he said.

The Bill was not intended to be brought in the first half of the Budget Session and it was targeted for second half beginning April 25. he said.

"I would prefer to do it in the Parliament as soon as possible."

Asked if traders, who have been traditionally supports of Bharatiya Janata Party, were opposed to the GST regime, he said, all trade and business organisations want GST because they want simplification of tax.

"They don't want 10 different departments to visit them and I think their concern is a valid one. You must have taxation system which is simple, which is hassle free and

ultimately a trader does not gain by evasion because taxes are normally passed on to consumer. And as far as BJP is concerned there is unequivocal support as far as GST is concerned," he said.

On a new timeline for roll out of the GST regime, Jaitley said it is a transactional tax and is not dependent on implementation only at the start of a financial year.

"Once the Constitutional amendment is passed, subordinate legislations will be passed, you can start it then at reasonable notice. GST never has to wait for April 1, it's not an Income Tax. It does not have anything to do with year to year.

"As I said, my preference is to do it by consensus.

“After all, you see, governments of all political parties will have to implement it."

 After years of delays and changes, GST was targeted to be rolled out from April 1 but has now been delayed yet again because it has not been passed by the Rajya Sabha.

The Bill is supported by all parties barring Congress, which has 67 MPs in Rajya Sabha and All India Anna Dravida Munnetra Kazhagam with 12 members.

Congress, the original author of the tax reform, is opposed to the current "flawed" version and wants GST rate to be capped at 18 per cent, a proposed state levy scrapped and an independent mechanism to resolve disputes on revenue sharing between states.

The government has support of 155 members in the 242-member Rajya Sabha, short of two-third or 162 votes needed to approve the Constitution amendment bill.

The image is used for representational purpose only. Photograph: Reuters