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GST: Congress unanimously cornered despite legitimate concerns

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New Delhi: The GST (Goods and Services Tax) Bill were heavily opposed by parties other than BJP, of course. However, in the last meeting between the Union Finance Minister Arun Jaitley and the State Finance Ministers, there was a general change of opinion.

Even left-winged Kerala government is now in support of the bill. Kerala’s finance minister, Thomas Isaac, stated that the state is fine to go ahead with the constitutional amendment after the Centre assured compensation for losses in the initial years. The left may have had some major issues with the bill.

Most states agreed that there shouldn’t be a constitutional cap of the GST rate. However, after a constant struggle by the finance ministry over the last two years, no states seem to insist on their previous demand and are ready to settle if the rate is mentioned in the GST Bill but outside of the Constitution.

Dual control will apply only to companies with a turnover of over ₹ 1.5 crores as per the unanimous demand of the state governments.

The state representatives also added that the centre should compensate for all the losses that arise as a result of the implementation of GST for five years.

Read Also: The Upper House is not the only hurdle before the GST Bill

Amit Mitra, West Bengal Finance Minister and Panel Chief of GST confirmed these requests and demands of the state governments.
The Cabinet has recognised the dropping of the 1% additional production tax and also guaranteed to compensate states for any revenue loss in the first five years of the rollout of the proposed indirect tax regime, as was expected by the state governments.

The compensation for the first three years will be 100 percent and for 75% and 50% for the next two.

So far the support status stands almost unanimously for the bill, with the biggest opposition from Rahul Gandhi and comrades.
While the opposition to the bill in the past two years pertained to state governments are raising questions about financially protecting the local businesses, these changes according to them are a step forward. Hence the support.

Harishanker Subramaniam, a national leader who had not exactly supported the bill so far, has also said that these changes are a very welcome step.

On the other side of the story, the Congress party has two additional demands. The first one is that any dispute between the state and the union should be settled by the GST council, which must comprise members from both sides.

The second being an issue raised by some of the state governments also, i.e., Constitutionalising the rates. If this is done, then any further amendments in this matter will be near impossible.

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