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Government Ready to Discuss Changes in GST Bill With Congress: Arun Jaitley

NEW DELHI: Finance Minister Arun Jaitley has offered to discuss with Congress changes in the GST bill but counselled the party to reconsider its suggestions saying some of them can “damage” the system much more than it can benefit.

Mr Jaitley, who needs Parliament approval for the Goods & Services Tax (GST) Bill in the winter session beginning Thursday to rollout the new indirect tax regime from planned April 1, said he is willing to discuss with Congress as some of its suggestions were not in the larger interest of the GST structure.

“We are reaching out to them, we are willing to discuss with them because some of these suggestions may not necessarily be in the larger interest of the GST structure,” he said at an Assocham event.

Mr Jaitley said those stalling reforms should realise that space for obsolete thinking is now shrinking and those who support reforms is much bigger than those who obstruct.

Mr Jaitley said it would be “extremely unfair” to the country “if we try to impose in the name of political compromise, a GST with a defective architecture”.

“And when tariff rate has to be mentioned in the Constitution itself, (then it) is a flawed architecture… Because the GST with flawed architecture can actually damage the system much more than it can benefit,” he said.

The Congress had stalled passage of the GST Bill in the last session of Parliament over its demand that a revenue-neutral rate not higher than 18 per cent be mentioned in the Constitution Amendment bill.

GST, which will subsume more than a dozen state levies to create a single market, is to be implemented from April 1, 2016. But a Constitution Amendment Bill could not go through the Rajya Sabha in the last session of Parliament due to opposition from the Congress.

The April 1 deadline may be missed if Parliament does not pass the Bill in the session from November 26 to December 23.

Once the Bill is passed, more than half of the states have to ratify it before Parliament passes another enabling bill to implement GST.

The Congress is opposed to states being given powers to levy additional 1 per cent tax on supply of goods over and above GST rate. It also wanted tobacco and petroleum products included within the GST ambit.

Stating that mentioning tariff rate in Constitution itself is a “flawed architecture,” he said this wasn’t there in Pranab Mukherjee’s as well as Mr Chidambaram’s bill.

Congress wants a clear dispute resolution mechanism to resolve disagreements between the states and the Centre as also 100 per cent compensation to states for revenue loss for all five years.

“Two suggestions have emerged. The first is make the Centre one-fourth (in the dispute resolution body) And if Centre becomes one-fourth, states become three-fourth (and they) can decide on India’s taxation policy. So, India as a union of state ceases to exist,” Mr Jaitley said.

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