Reconsider your stance on GST: Arun Jaitley appeals to Congress in Rajya Sabha

In a fresh appeal to Congress, the government on Wednesday asked it to reconsider its stance on GST, particularly with regard to its insistence on judge-headed dispute resolution panel, saying it will be a "misadventure" of handing over taxation powers to judiciary which "step by step, brick by brick" is encroaching upon the legislature. 

Finance Minister Arun Jaitley sought to reach out to Congress in the Rajya Sabha after the main opposition party said it was ready to give full support to GST provided its three key recommendations are accepted by the government.

Replying to a debate on the Finance Bill, Jaitley said, "For heaven's sake, I beseech you in the interest of Indian democracy not to go on this misadventure (judge-headed panel)...With the manner in which encroachment of legislative and executive authority by India's judiciary is taking place, probably financial power and budget making is the last power that you have left. Taxation is the only power which states have."

He added, "It would be wholly misconceived for any political party to say 'let us hand over the taxation power to judiciary'. That is your (Congress) proposal." Jaitley, who is also the Leader of the House, asked the Congress to "reconsider" its stance on GST which has been stuck in the Rajya Sabha for long due to resistance by the main opposition party.
Conceding that the Goods and Service Tax (GST) constitutional amendment bill was originally conceived by the UPA, he said he will be holding talks again with the Congress leaders so that the bill could be taken up in the Monsoon session.

After Jaitley's reply, the Rajya Sabha approved the Finance Bill and the Appropriation Bill by voice vote, thus completing the budgetary exercise in Parliament. In his reply, Jaitley referred to the Supreme Court order earlier in the day, asking the government to create a disaster mitigation fund, in addition to National Disaster Relief Fund (NDRF) and State Disaster Relief Fund (SDRF), to deal with drought. 

He said the Appropriation Bill had been passed and wondered from where the extra money would come to comply with the directions of the apex court. "Can't you see, step up step, brick by brick, the edifice of India's legislature is being destroyed. And outside the Appropriation Bill, we are being told to create this levy this fund.

"We will have budget-making going outside Parliament and if there is a taxation dispute between Centre and states, a major party says now let the judge decided, so taxation power also goes," the Minister said. Taxation is a political issue and should be sorted out politically, he said, adding this power cannot be handed over to the courts. 

Jaitley asked the Congress party to either reconsider its three preconditions -- setting up of judge-headed dispute resolution panel, putting a GST tax rate cap of 18 per cent in Constitution and abolition of 1 per cent additional tax on inter-state movement of goods -- or else allow Parliament process of voting to decided on the fate of the GST bill.

The GST Bill, though approved by the Lok Sabha, is held up in the Rajya Sabha where the ruling NDA does not have a majority. "I will certainly be discussing with you (Anand Sharma) and your colleagues," he said, adding the government would like to take up the GST bill in the monsoon session of Parliament. 

GST would alter the taxation paradigm by economically uniting the whole country, he said, observing that the indirect taxation proposal would eliminate evasion and improve compliance.
He said that the GST Bill was brought by the UPA but there was no consensus among the states as manufacturing states feared that they would lose revenue.

The NDA, he said, tried to bring on board the manufacturing states by proposing one per cent additional tax on inter-state movement of goods.
On the demand of putting 18 per cent GST tax cap in the constitution, Jaitley said it might not be possible to amend the Constitution the state had to impose a higher tax to meet any contingency.

He said that there was no concept of cap ever since the UPA came out with the GST bill and even the Standing Committee did not recommend any cap.
"There is a fallacy to have a uniform cap," Jaitley said.

Opposing the cap, he questioned what would happen in case of a drought situation and states want to impose an additional tax. He wondered whether it would be easy to amend the Constitution again and again.
He added that there cannot be uniform tax rate for all commodities and questioned if luxury cars should be taxed at the same rate as "aam aadmi" items. "Two wrongs never make a right," he said.